The socially optimal amount of pollution abatement occurs where society's marginal:
A. benefit of abatement exceeds its marginal cost of abatement by the greatest amount.
B. benefit of abatement equals its marginal cost of abatement.
C. benefit of abatement is zero.
D. cost of abatement is at its maximum.
Ans: B. benefit of abatement equals its marginal cost of abatement.
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Jennifer has just finished high school and is deciding whether to start working or go to college. She has already been offered a job that pays $35,000 a year. Four years of college will cost $12,000 each year. She would earn an extra $20,000 each year after she graduates for the 45 years she plans on working until she retires. Assume that the interest rate is 8.5%. Given this information, what should Jennifer do?
A. Take the job B. Go to college C. Take the job until the interest rate goes down and then go to college D. It cannot be determined from the information given.
Under conditions of perfect competition, an individual producer
a. always maximizes output. b. operates where MR equals MC. c. never suffers a loss. d. operates where MR is greater than MC.
The quantity sold in a market will increase if the government
a. decreases a binding price floor in that market. b. decreases a binding price ceiling in that market. c. increases a tax on the good sold in that market. d. More than one of the above is correct.
Table 10-1 Aggregate Quantity Aggregate Quantity ? Demanded Supplied Price (billions) (billions) Level $3500 $2900 65 3400 3000 75 3350 3150 90 3250 3250 110 3100 3400 130 In Table 10-1, what is the equilibrium level of real output and the equilibrium price?
A. $3,100 real output and a price of 75 B. $3,250 real output and a price of 110 C. $3,350 real output and a price of 90 D. $3,400 real output and a price of 75