Mary plants a number of trees in her garden every week, which keeps her neighborhood cool. Which of the following is true?

A) The marginal social cost of planting a tree is lower than the marginal private cost of planting a tree.
B) The marginal private benefit of planting a tree is higher than the marginal social benefit of planting a tree.
C) There is an external benefit in planting a tree.
D) There is a deadweight loss in planting trees.

C

Economics

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If a consumer is buying only two goods, A and B, then he or she will be in equilibrium only when MUa = MUb

a. True b. False Indicate whether the statement is true or false

Economics

Steve and Lee have been shipwrecked on a deserted island in the Hawaiian chain. Their economic activity consists of either gathering pineapples or fishing. We know Steve can catch four fish in one hour or harvest two baskets of pineapples. In the same

time Lee can reel in two fish or harvest two baskets of pineapples. If they each spend four hours a day fishing and four hours a day harvesting pineapples, how many of each will Steve produce? How many will Lee produce? What will their total production be? If Steve and Lee don't trade with each other, who is better off? Why? Assume Lee and Steve both operate on straight-line production possibilities curves. What is Steve's opportunity cost of producing a basket of pineapples? Of a producing a fish? What is Lee's opportunity cost of producing a basket of pineapples? Of a producing a fish? If Steve and Lee traded, who has the comparative advantage in fish? Pineapples? If Lee and Steve specialize in and trade the good in which they have a comparative advantage, how much of each good will be produced in an eight hour day? What are the gains from trade?

Economics