When a person is making a decision at the margin he or she is comparing the additional benefit of that activity to the additional cost of the proposed action

Consider an economy that only produces steel and shoes; steel is capital intensive and shoes are labor intensive. How will emigration of labor from this economy affect the marginal productivity of labor?

a. It will fall. b. It will not change. c. It will rise. d. It will fall in the short run and rise in the long run.

The greater the magnitude of the external costs of production, a. The larger is the deadweight loss from overproduction

b. The greater would be the optimal pollution tax. c. The further the private market solution ignoring those costs would deviate from the socially efficient level of output. d. All of the above are true.