One implication of the phenomenon described by economist Richard Easterlin as the "hedonic treadmill" is that:
A. People who consume more goods and services are happier than those who consume less
B. People can only become happier if they are consuming more and more
C. There is a threshold of consumption that one must cross before one can be happy
D. We can combine the happiness of different individuals to get "total happiness"
B. People can only become happier if they are consuming more and more
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Over the last decade, a country experiences a significant increase in labor productivity
a. Draw and label a labor market supply and demand diagram. Show how the equilibrium real wage rate and the equilibrium quantity of labor change as productivity increases. b. Draw and label a production function. Show how potential GDP changes as labor productivity increases.
The external marginal cost of producing coal is MCexternal = 6Q while the internal marginal cost is MCinternal = 4Q. The inverse demand for coal is given by P = 120 ? 2Q. What is the socially efficient level of output?
A. 10 B. 15 C. 20 D. 8