The figure above shows the market for a good with an external benefit. If the government wants to grant a subsidy so that the efficient quantity is produced, the subsidy must equal ________ per unit.
A) 100
B) 150
C) 250
D) 300
E) 50
Question 2
Which of the following is likely to cause a decrease in both the wage rate and the level of employment in an industry?
A) A right shift in the supply curve for labor, without any change in the demand curve for labor
B) A left shift in the supply curve for labor, without any change in the demand curve for labor
C) A right shift in the demand curve for labor, without any change in the supply curve for labor
D) A left shift in the demand curve for labor, without any change in the supply curve for labor
A, External respiration; B, internal respiration.
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