Q 1: When firms make decisions about output and about the amount of pollution th
ID: 2439937 • Letter: Q
Question
Q 1: When firms make decisions about output and about the amount of pollution that they produce, without government regulation
Select one:
a. firms only consider their private benefits and costs when making their choices.
b. firms choose not to pollute because it's bad for their public image.
c. government regulation is used only in command economies.
d. social costs are always reflected in the market prices firms pay for their inputs.
e. pollution costs are passed on to consumers in the form of higher prices.
Question 2
A student graduates from college and gets a high-paying job. As a result of the increase in income, the student buys more frozen pizzas. For the student, frozen pizzas must be a(n)
Select one:
a. inferior good.
b. normal good.
c. substitute.
d. standardized product.
e. complement.
Question 3
To promote development, the governments of LDCs should pursue policies that
Select one:
a. improve the quality of labor.
b. enhance capital accumulation.
c. raise technology levels.
d. increase efficiency.
e. all of the choices.
Question 4
If an economy is experiencing unemployment, it is operating at a point
Select one:
a. below its PPC.
b. beyond its PPC.
c. on its production possibilities curve (PPC).
d. at the horizontal intercept of its PPC.
e. at the vertical intercept of its PPC.
Q 5: Which of the following are potential obstacles to economic development in LDCs?
Select one:
a. Lack of resources
b. Low educational attainment
c. War and political instability
d. Traditional methods of production and ownership of resources
e. All of the choices
Explanation / Answer
1. When firms are not regulated then they never consider about the pollution and the externality. It is government regulation due to which the are forced to regulate the pollution.
A. Firms consider only their private benefit and cost when making their choices.
2. As soon as we switch from one product to another due to increase in income level then the product which we start consuming is known as Normal Good and the good which we stopped consuming is termed as Inferior Good.
Frozen Pizza : Normal Good
3. To promote development the Government of Less Developed Countries(LDCs)
Improve quality of labor (Better standard of living)
Enhance capital accumulation in order to finance
Raise technology level to upgrade the existing facility and
Enhance efficiency.
Correct option is e. all the choices.
4. When full employment is experienced by the economy then the economy is operating at PPC.
When unemployment is experienced by economy then economy is operating at a point
A. Below it's PPC
5. E. All of the choices.
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