Harold owns a cranberry bog in which he grows cranberries. Harold's farm is a competitive, profit-maximizing firm. As such, Harold much decide

(i)	how many cranberries to sell.
(ii)	what price to charge for his cranberries.
(iii)	what wages to pay his workers.
(iv)	how many workers to hire.
	a.	(i) only
	b.	(ii) and (iii) only
	c.	(i) and (iv) only
	d.	(i), (ii), (iii), and (iv)

23.Which of the following would increase the demand for labor?

(i)	a decrease in the output price
(ii)	an increase in the output price
(iii)	a labor-saving technological advance
(iv)	a labor-augmenting technological advance
	a.	(i) only
	b.	(i) and (iii) only
	c.	(ii) only
	d.	(ii) and (iv) only

24.Which of the following illustrates the concept of a negative externality?

a.	A college professor plays a vigorous game of racquet ball with the racquet he recently purchased.
b.	A flood wipes out a farmer's corn crop.
c.	A college student plays loud music on his new stereo system at 2:00 a.m.
d.	A janitor eats a hamburger during his lunch break.

25.Negative externalities lead markets to produce

a.	greater than efficient output levels and positive externalities lead markets to produce smaller than efficient output levels.
b.	smaller than efficient output levels and positive externalities lead markets to produce greater than efficient output levels.
c.	greater than efficient output levels and positive externalities lead markets to produce efficient output levels.
d.	efficient output levels and positive externalities lead markets to produce greater than efficient output levels.

26.Suppose that electricity producers create a negative externality equal to $5 per unit. What is the relationship between the equilibrium quantity and the socially optimal quantity of electricity to be produced?

a.	They are equal.
b.	The equilibrium quantity is greater than the socially optimal quantity.
c.	The equilibrium quantity is less than the socially optimal quantity.
d.	There is not enough information to answer the question.

27.Which of the following is an example of a positive externality?

a.	air pollution
b.	a person littering in a public park
c.	a nice garden in front of your neighbor's house
d.	the pollution of a stream

28.If a market is characterized by a positive externality that is not the result of a technology spillover,

a.	the socially optimal level of output is less than the equilibrium level of output, and the optimal price is greater than the equilibrium price.
b.	the socially optimal level of output is greater than the equilibrium level of output, and the socially optimal price is less than the equilibrium price.
c.	the socially optimal level of output is greater than the equilibrium level of output, and the socially optimal price is greater than the equilibrium price.
d.	the socially optimal level of output is less than the equilibrium level of output, and the socially optimal price is less than the equilibrium price.

29. If the government wanted to ensure that the market reaches the socially optimal equilibrium in the presence of a technology spillover, it should

a.	impose a corrective tax on any firm producing a technology spillover.
b.	offer tax credits to consumers who are adversely affected by the new technology.
c.	subsidize producers by an amount equal to the value of the technology spillover.
d.	provide research grants to those firms not currently engaging in research to increase competition in the industry.

30.If it is illegal for a biochemical manufacturer to release its waste into a nearby stream, then this is an example of

a.	a market-based policy.
b.	a command-and-control policy.
c.	tradable pollution permits.
d.	transaction costs.