Suppose that a powerplant is given a permit to pollute 10 tons of carbon into the atmosphere. As the powerplant operates, it can generate $200 of profit selling electricity per ton of carbon that it sends into the atmosphere. If the price of the carbon permit is $300 per ton, then:
A. the powerplant is better off shutting down and selling its permit.
B. the powerplant is better off buying more permits and selling more electricity.
C. the powerplant is better off selling electricity and using the permits to pollute 10 tons of carbon.
D. the powerplant is better off shutting down and buying more permits.
Answer: A
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Federal government expenditures, as a percentage of GDP,
A) rose from 1950 to 1991, fell from 1992 to 2001, and have risen from 2001 to the present. B) rose from 1950 to 1980, fell from 1981 to 2001, and have risen from 2001 to the present. C) have fallen since the early 1950s to the present. D) rose from 1950 to 2001 and then fell from 2001 to the present. E) have risen since the early 1950s to the present.
This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.According to the figure, MiiTunes:
A. does not have a dominant strategy. B. has a dominant strategy to charge low prices. C. has more than one dominant strategy. D. has a dominant strategy to charge high prices.
The marginal product of land depends only on the quantity of land available
a. True b. False Indicate whether the statement is true or false
Which of the following is an example of government influence on supply?
a) law of supply b) subsides c) marginal costs d) market supply curve