Metro Mic ) McEachern 5th ed. Instructor: Alexander Tsoucatos, PhD b. Funding fo
ID: 1115454 • Letter: M
Question
Metro Mic ) McEachern 5th ed. Instructor: Alexander Tsoucatos, PhD b. Funding for the construction of a statue in Alabama cThe provision of subsidies to wheat producers d. Dealing with labor union issues e·The implementation oftort reforms 8. At the market output and price for a good whose production causes pollution, a. the marginal social cost of production is negative b. the marginal social cost of production exceeds the marginal social benefit of c. the marginal private cost of production equals the marginal private benefit of production d. the marginal social benefit of production equals the marginal social cost of production e. the marginal social benefit of production exceeds the marginal private cost of production 9. The total welfare cost of a monopoly that engages in rent-seeking activities: a. equals only the portion of lost consumer surplus that is not transferred to the monopolist. b. includes the use of resources devoted to rent seeking. c. equals the loss of welfare in the economy because of barriers to entry d. equals the total economic profit earned by the monopolist. e. excludes the use of resources devoted to rent seeking. 10. The socially efficient level of output is determined where: a. marginal social cost equals marginal social benefit. b. marginal private cost equals marginal social benefit. c. average social cost equals average private cost d. average private cost equals average social benefit. e. total social cost equals total social benefit. 11. A firm's demand curve for investment is its: a. expected annual earnings curve. b. marginal product curve. C. marginal revenue curve. d. expected rate of return on investment curve. e. supply of loanable funds curve. 12. Identify the correct statement about the distribution of income in the United States in the last two decades. a. The share of income of the highest fifth quantile has increased in the last two decades b.The share of income of the lowest fifth quantile has increased in the last two decades c.The share of income of the highest fifth quantile has decreased in the last two decades d. The share of income of the lowest fifth quantile has decreased in the last two decades because of an increase in the number of double-income households because of an increase in the number of double-income households. because of an increase in the number of single-parent households. because of a decrease in in-kind transfers Copyright Cengage Learning. Powered by Cognero. Page 3Explanation / Answer
8). The answer is b).
This is because since the production cause pollution, this will cause some damage to the environment which has not been accouted for by the producer. Thus the social cost will exceed the social benefit.
9). c).
This is because monopoly losses are evident because of barriers to entry. The monopoly in this case does not indulge into innovation, and thus become inefficient in its production.
10). a).
The equilibrium level of output exists where Marginal Social Cost = Marginal Social Benefit
11). d).
The expected rate of return will determine if the firm will invest in a project or not. And hence, the demand of an investment will be determined by the expected rate of return curve.
12).