To enhance social welfare, the government should encourage the production of

To enhance social welfare, the government should encourage the production of
 a. all goods
  b. no goods
  c. goods that provide positive externalities
  d. goods whose social cost exceeds their private cost
  e. goods that provide negative externalities

QUESTION 2

Suppose a firm is a price searcher in the product market and hires labor in a perfectly competitive labor market. If the wage rate is 20, the marginal product of the last worker hired is 5, and the firm is hiring the profit-maximizing amount of labor, then the marginal revenue from the last unit of output must be
 a. 1
  b. 1.50
  c. 4
  d. 5
  e. 20

QUESTION 3

Which of the following responses to a positive externality enhances society's welfare?
 a. taxes
  b. subsidies
  c. effluent fees
  d. quotas
  e. a cut in funding

QUESTION 4

Suppose a firm is a price searcher in the product market and hires labor in a perfectly competitive labor market. If the wage rate is 20, the marginal product of the last worker hired is 5, and the firm is hiring the profit-maximizing amount of labor, then the marginal revenue product of the last worker hired must be
 a. 1
  b. 1.50
  c. 4
  d. 5
  e. 20

QUESTION 5

Which of the following provides a positive externality?
 a. smog
  b. inoculating children against measles
  c. hamburgers
  d. litter
  e. an increase in your earnings