The following table shows four firms, the amount each pollutes, the marginal cost for each firm to clean up pollution, and the total cost to each firm of eliminating all pollution.FirmTotal Discharge (in tons)Marginal Cost of Cleanup(per ton)Total Cost of CleanupA60$5.00$300B70$8.00$560C80$7.50$600D90$4.00$360The total discharge of these four companies is 300 tons. Assume there is no one else who pollutes and these firms want to maximize profits. If the government wishes to cut discharge by 50 percent, it could do so by establishing an effluent fee of:
A. $5.50 per ton.
B. $10.00 per ton.
C. $3.00 per ton.
D. $4.50 per ton.
Answer: A
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Owners face unlimited liability in
A) national corporations and global corporations. B) partnerships and corporations. C) proprietorships and corporations. D) proprietorships and partnerships.
The product-variety externality states that entry of a new firm conveys a negative externality on consumers
a. True b. False Indicate whether the statement is true or false
Which of the following accurately contrasts AD2 and AD3?
a. AD2 shows an increase in price level; AD3 shows a decrease in price level.
b. AD2 shows a decrease in price level; AD3 shows an increase in price level.
c. AD2 shows an increase in real GDP demanded; AD3 shows a decrease in real GDP demanded.
d. AD2 shows a decrease in real GDP demanded; AD3 shows an increase in real GDP demanded.
Refer to the above graph. At output level H, the area:
A. 0CGH represents the firm's variable cost of production. B. 0CGH represents the firm's fixed costs of production. C. ACGE represents the firm's economic profit. D. 0AEH represents the firm's economic profit.