One of the problems created by price floors set above the equilibrium is:
A. the effect on firm profitability.
B. firms don't have incentives to reduce costs.
C. the creation of surplus.
D. how to cope with the shortages.
Answer: C
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Firm A and Firm B emit 300 tons of pollution each and each have marketable permits that allow each to emit 100 tons of pollution
If it costs $5,000 for Firm A to eliminate 100 tons of pollution and it costs Firm B $6,000 to eliminate 100 tons of pollution, then A) Firm B sells its permits to Firm A for a price above $6,000. B) Firm A sells its permits to Firm B for a price below $6,000. C) Firm A sells its permits to Firm B for a price above $6,000. D) Firm B sells its permits to Firm A for a price below $6,000. E) Neither Firm A nor Firm B sells permits because neither has extra permits.
The idea behind comparative advantage reflects the possibility that one party a. may be able to produce something relatively more efficiently than another. b. may be able to produce something at a lower opportunity cost than another. c. may be able to produce something more cheaply than another
d. all of the above
Bill the butcher is upset because the government plans to tax beef $.10 a pound. "I hate paying taxes," he says. "Because of this, I'm raising all my beef prices by $.10 a pound. The consumers will bear this burden, not me." Do you see anything wrong with this way of thinking? Explain
A typical American worker covered by unemployment insurance receives
a. 50 percent of his former wages for 26 weeks. b. 50 percent of his former wages for 52 weeks. c. 100 percent of his former wages for 26 weeks. d. 100 percent of his former wages for 52 weeks.