Which one of the following statements regarding transferable pollution permits is false?
a. An equilibrium permit price will be obtained through the trading of permits
b. Polluting firms generally prefer emissions standards to a system of tradable permits
c. A system of tradable permits was set up under the 1990 Clean Air Act Amendments
d. A system of tradable permits could be used to help reduce carbon dioxide emissions
e. A system of tradable permits achieves a given level of pollution reduction at the lowest cost
Ans: b. Polluting firms generally prefer emissions standards to a system of tradable permits
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Which of the following does NOT shift the demand curve for broccoli?
A) an increase in the cost of fertilizer used to grow broccoli B) a warning by the U.S. Surgeon General that broccoli causes schizophrenia C) an increase in the price of spinach, a substitute for broccoli, because rodents gobbled up much of this year's spinach crop D) a decrease in the price of spinach, a substitute for broccoli, because of a bumper crop of spinach this year
In the aggregate production function Y = A , real business cycle theory treats ________ as the key independent variable
A) potential output B) productivity C) the capital stock D) the labor input
Payments to stockholders are called ______, and payments to bondholders are called _______
a. interest, dividends b. profits, dividends c. dividends, profits d. dividends, interest e. dividends, mortgages
The economy can operate
A) beyond its institutional PPF but not beyond its physical PPF. B) on both its institutional PPF and its physical PPF, but not at the same time. C) under its physical PPF but not under its institutional PPF. D) a and b E) a, b, and c