A steelmaking plant pollutes the air and water so __________
A. the marginal social cost of producing steel exceeds the marginal private cost by the amount of the marginal external cost
B. the marginal social cost of producing steel is less than the marginal private cost by the amount of the marginal external cost
C. the marginal private cost of producing steel equals the marginal ex-ternal cost plus the marginal social cost
D. the marginal private cost of producing steel minus the marginal social cost equals the marginal external cost
A MSC = MC + marginal external cost, so MSC ? MC = marginal external cost.
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The above figure shows Bobby's indifference map for soda and juice. B1 indicates his original budget line. B2 indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that
A) Bobby views soda as an inferior good. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) the income elasticity of demand for soda is 1.
Which of the following will most likely have the greatest effect on an individual's consumption function?
a. winning a small amount in the lottery b. a one-time tuition grant c. a week of high overtime pay d. an inheritance paying a modest annual dividend