Denise is thinking about setting up a butterfly garden in her backyard. She estimates that it will cost her $2,000 to purchase and install special plants and an irrigation system to attract butterflies. The benefit she expects to receive is $1,800 . In addition, neighbor Billy will receive a benefit of $150 and neighbor Sammy will receive a benefit of $100 . From this, we can conclude that
a. butterflies are a negative externality for Billy and Sammy
b. Denise will set up the butterfly garden without any help from her free-rider neighbors
c. if Sammy refuses to contribute to the butterfly garden, he will be unable to enjoy its benefits if it is built
d. if Billy refuses to contribute to the butterfly garden, Denise will not have one
e. if Billy and Sammy contribute the amounts at which they value the butterfly garden, Denise will set it up. Otherwise, no garden.
E
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If the demand for labor ________, real wages fall and the amount of labor employed ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Suppose that a long-run adjustment in a perfectly competitive industry results in decreased industry output but leaves price unchanged. Which of the following must be true?
a. The market demand curve did not shift b. The market demand curve shifted left; the market supply curve shifted right c. The market supply curve shifted left; the market demand curve shifted right d. Both market supply and demand increased, but supply increased more than demand e. The industry is a constant-cost industry