Transferable permits are likely to result in less inefficiency, relative to a pollution tax, when
a. The marginal costs of damages are steep and the marginal costs of pollution reduction are relatively stable
b. The marginal costs of damages are steep and the marginal costs of pollution reduction are steep
c. The marginal costs of damages are relatively stable and the marginal costs of pollution reduction are relatively stable
d. The marginal costs of damages are relatively stable and the marginal costs of pollution reduction are steep
e. The marginal costs of damage are elastic and the marginal costs of pollution reduction are also elastic
Ans: a. The marginal costs of damages are steep and the marginal costs of pollution reduction are relatively stable
You might also like to view...
Harvey Rabbitt pays for monthly cable TV service. Last week the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area
How is the market for cable TV services affected by this? A) There is a decrease in the quantity of cable TV service supplied. B) There is a decrease in the demand for cable TV service. C) There is a decrease in the supply of cable TV service. D) There is an increase in the supply of cable TV service.
Refer to Figure 2-18. Which two arrows in the diagram depict the following transaction: Dorian Gray hires "Wild Oscar," a professional portrait artist, to paint his picture
A) J and M B) K and G C) K and M D) J and G
If a monopoly can advertise and as a result the demand curve will become more inelastic, the monopoly
A) should always engage in the advertising. B) should engage in the advertising until the demand curve becomes more elastic. C) will earn higher gross profit if it advertises. D) None of the above.
If a firm doubles its resources and generates an output level which is more than double, it is said to be experiencing:
a. economic fluctuations. b. recession. c. diseconomies of scale. d. increasing marginal returns to a factor. e. economies of scale.