Suppose you produce 10 bikes a day for a total cost of $1000. Total costs increase to $1100 when you produce 15 bikes. Finally, total costs increase to $1300 if you make 20 bikes
A graph showing the relationship between total costs and the number of bikes produced would be A) a negatively-sloped line that becomes steeper.
B) a positively-sloped line that becomes steeper.
C) a negatively-sloped line that becomes flatter.
D) a positively-sloped line that becomes flatter.
B
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Dina is driving to work on an interstate highway at 90 MPH, well in excess of the legal speed of 65 MPH. Sandy is also driving to work at the same time, going 85 MPH. A state trooper pulls Dina over and gives her a speeding ticket. Sandy continues driving, but if Dina had not been speeding, the trooper would have ticketed Sandy instead. In terms of externalities, this story shows that:
a. Sandy's actions gave Dina a positive externality. b. Dina's actions gave Sandy a positive externality. c. Sandy's actions gave Dina a negative externality. d. Dina's actions gave Sandy a negative externality. e. Dina's and Sandy's actions did not create any externalities.
Refer to the below graph for the labor market. The government decides to impose a wage tax as shown on the graph. The result is that:
A. More workers enter the labor market due to the higher wage rate being paid
B. The employers and laborers will split the tax evenly, each paying $.25 to the government
C. The wage received by laborers will rise to $5.40 and the labor cost to employers will fall to $4.90
D. The wage received by laborers will fall to $4.90 and the labor cost to employers will rise to $5.40