The marginal social cost of a chemical is $100 per ton and its marginal private cost is $85 per ton. What is the marginal external cost of the chemical?
What will be an ideal response?
Marginal external cost equals marginal social cost minus marginal private cost. So the marginal external cost of the chemical is $100 - $85 = $15 per ton.
You might also like to view...
If the German interest rate is 4% and the U.S. interest rate is 5%, what is the expected change in the value of the dollar in terms of the euro?
A) 1% B) -1% C) 9% D) -9%
Suppose the current account of a country is initially in balance. A new transaction occurs so that the current account is now in surplus. Official reserve balance is maintained before and after the transaction occurs. From this, we know that
A) the balance of trade is now in surplus. B) the balance of goods and services is now in surplus. C) the capital account is now in deficit. D) the government must make official reserve transactions.
Unions, by nature, must ____ their membership in order to ____ wages
a. open; lower b. open; raise c. restrict; lower d. restrict; raise
Which one of the following statements is TRUE?
A. It is easy for dead capital resources to be allocated to their best possible use. B. Dead capital is most frequently found in countries with well-defined property rights. C. It is difficult for dead capital resources to be insured or traded. D. Dead capital is most frequently found in the most prosperous countries.