The most efficient distribution of pollution abatement is such that the:
A. marginal cost of abatement is the same across all polluters.
B. extent of pollution abatement is the same across all geographic regions.
C. largest reductions in pollution are made by the largest polluters.
D. extent of pollution abatement is the same across all polluters.
Answer: A
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The concept of utility maximization:
A. is solely used to measure an individual's satisfaction with his consumption choices. B. can be used broadly to think about choices made motivated by satisfaction, envy, status, or kindness. C. assumes each individual seeks to increase his own personal satisfaction regardless of others. D. None of these is true.
Economists usually use real GDP per capita to measure ______.
a. the distribution of income b. per worker output c. the standard of living d. economic growth
Which of the following goods is likely to have the lowest elasticity of demand?
A. Automobile B. Furniture C. Diamonds D. Milk
There are two existing firms in the market for computer chips. Firm A knows how to reduce the production costs for the chip and is considering whether to adopt the innovation or not. Innovation incurs a fixed setup cost of C, while increasing the revenue. However, once the new technology is adopted, another firm, B, can adopt it with a smaller setup cost of C/2. If A innovates and B does not, A earns $20 in revenue while B earns $0. If A innovates and B does likewise, both firms earn $15 in revenue. If neither firm innovates, both earn $5. Under what condition will firm A innovate?
A. C < 30 B. 35 > C > 25 C. 10 > C > 0 D. C > 30