A new Mexican restaurant opened in the town of Manchester. The residents of the town are
a. happy because of the product-variety externality, while other restaurant owners are unhappy because of the business-stealing externality.
b. happy because of the business-stealing externality, while other restaurant owners are unhappy because of the product-variety externality.
c. unhappy because of the product-variety externality, while other restaurant owners are happy because of the business-stealing externality.
d. unhappy because of the business-stealing externality, while other restaurant owners are happy because of the product-variety externality.
a
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The important characteristic of normative statements is that they
A) explain what really exists. B) are based on somebody's values and cannot be tested. C) explain what normally happens in the real world. D) help guide us to what will normally occur if some economic variable changes its value. E) do not use the ceteris paribus assumption.
Assume that the labor market is perfectly competitive. An increase in the productivity of labor
A) causes the marginal factor cost of labor to decrease. B) generates a lower wage rate. C) causes an increase in the demand for labor. D) causes a reduction in the demand for labor since each worker is now more productive.