Suppose that the government reduces income taxes. Which of the following is the most likely result?
a. An increase in human capital investment
b. A decrease in consumption
c. An increase in government spending
d. A decrease in government spending
e. A decrease in human capital investment
A
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If positive externalities are present in a free market, ________ at any output level
A) the marginal cost of production equals the average cost of production B) the marginal social cost of production exceeds the marginal private cost C) the marginal private benefit from production equals marginal social benefit D) the marginal social benefit of production exceeds marginal private benefit
An argument against convergence is that law of diminishing marginal returns does not hold for
a. labor. b. physical capital. c. natural resources. d. technological improvements.