Suppose that a negative externality is created by the production of good X. Which of the following statements is correct?
a. The social cost of producing good X includes the private cost plus the cost to bystanders of the externality.
b. The increased social cost can be graphed as a decrease in demand.
c. The market equilibrium quantity will be the socially optimal quantity as long as the government does not interfere.
d. Both a and b are correct.
a
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If a firm introduces some technology that substitutes capital for labor, ________, assuming all else equal
A) there will be an upward movement along the labor demand curve of the firm B) there will be a downward movement along the labor demand curve of the firm C) there will be a rightward shift in the labor demand curve of the firm D) there will be a leftward shift in the labor demand curve of the firm
The cost, c, of a college education that serves only as a signal of a high-quality worker is $10,000. The wage of a known high-quality worker, wh, is $30,000. The wage for a known low-quality worker, wl, is $10,000
For what value of the share of the work force that is of high quality, s, is a pooling equilibrium possible? A) s > 0.5 B) s = 0 C) s = 0.25 D) s < 0.45