Sunny’s Spa knows that a 5 percent increase in the price of their massages results in a 15 percent decrease in the number of massages purchased. What is the elasticity of demand facing Sunny’s Spa?

The marginal social benefit from the production of the last unit of a good is $4,875. If the willingness to pay for that unit is $4,250, what is the external benefit from its production?

A positive externality results when

How does behavioral economics explain market bubbles and crashes?

__________________ include both the private costs incurred by firms and also costs incurred by third parties outside the production process.

Diminishing marginal utility means that

What is a key disadvantage of command-and-control regulation related to firm behavior after meeting standards?

The figure above shows a firm operating in a monopolistically competitive market. To maximize profit, the firm produces

When economies of scale for a market are large relative to the quantity demanded in the market, a ____________ exists.

Owen owns a landscaping business in Alabama. The table below is Owen’s total product schedule. Owen pays each worker $1500 per month and he pays an equipment lease of $600 a month for various tools. These are his only costs. When Owen has a staff of 3 workers, his average total cost equals:Quantity of Labor(workers)Total Product(lawns mowed per month)0014021003150419052206240