If two firms pollute, and the increase in costs to Firm A from decreasing pollution is equal to the decrease in costs to Firm B from increasing pollution:
A. the firms cannot benefit from trading the right to pollute.
B. the firms can benefit by trading the right to pollute.
C. while both firms can benefit from trading, there is no way for them to determine an agreeable price.
D. both firms will stop polluting.
Answer: A
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If a firm is in a perfectly competitive world but decides to charge a higher price than its competitors,
A) the firm's profits will be zero or negative, and the firm will fail in the long run. B) the firm's profits will be zero or negative, and the firm will fail in the short run. C) the firm's profits will be positive or negative, and the firm will fail in the short run. D) the firm's profits will be positive or negative, and the firm will fail in the long run.
If people have a sudden increase in confidence in the open economy of the U.S. and want to invest there, the interest rate:
A. increases, as NCO increases. B. falls, as NCO falls. C. falls, as NCO increases. D. increases, as NCO decreases.
An increase in the price of gasoline will lead to a(n)
a. increase in the supply of gasoline b. decrease in the supply of gasoline c. no change in the supply of gasoline d. decrease in the quantity of gasoline supplied e. increase in the quantity of gasoline supplied
In England, the Thatcher government substituted a “poll tax” for the local property tax. People took strong exception to the tax, which is basically a head or “lump sum” tax. The principle of taxation such a tax violates is called
A. the benefits principle. B. the excess burden principle. C. the ability-to-pay principle. D. the constitutional principle.