The external marginal cost of producing coal is MCexternal = 6Q while the internal marginal cost is MCinternal = 4Q. The inverse demand for coal is given by P = 120 ? 2Q. What is the socially efficient level of output?

Explain why the purchase and sale of used goods and of financial assets are not included in the calculation of GDP even though transactions in these items amount to billions of dollars daily

What will be an ideal response?

If a rich country grows at a faster rate than a poor one, then

A) the gap in their standard of living will widen over time. B) the gap in their standard of living will close over time. C) the difference in their living standards will not change over time. D) whether or not the living standards gap widens or closes over time depends on the absolute size of the relative growth rates.