Dioxin emission that results from the production of paper is a good example of a negative externality because
a. self-interested paper firms are generally unaware of environmental regulations.
b. there are fines for producing too much dioxin.
c. self-interested paper producers will not consider the full cost of the dioxin pollution they create.
d. toxic emissions are the best example of an externality.
c
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Suppose two duopolists operate at zero marginal cost. The market demand is p = a - bQ. If firm 1 is the Stackelberg leader, what level of output will it choose?
A) q1 = (a - bq2 )/2b B) q1 = (a - 2bq2 )/2b C) q1 = a/b D) q1 = a/2b
A defendant believes there is a 70 percent chance that the plaintiff will win $800,000 and a 30 percent chance that the plaintiff will lose and be awarded nothing (zero). The plaintiff believes that there is a 90 percent chance that they will win $800,000 and a 10 percent chance that they will be awarded nothing (zero). The plaintiff's litigation cost is $300,000 and the defendant's litigation
cost is $200,000. What is the plaintiff's expected value from the litigation? A) $375,000 B) $420,000 C) $760,000 D) $520,000
Wanda quit her job because she was unhappy at work. Arnold was fired from his landscaping job because his company was downsizing. Who is eligible for unemployment insurance benefits?
a. both Wanda and Arnold b. Wanda but not Arnold c. Arnold but not Wanda d. neither Wanda nor Arnold
The status quo bias implies that:
A. people are restricted in their choices. B. people are biased toward making a mistake. C. people do not like making changes. D. people's actions often are influenced by what they perceive as the default choice.