The value of the best alternative foregone is the opportunity cost of making a decision.
Answer the following statement true (T) or false (F)
True
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We allocate resources efficiently when
A) marginal benefit is equal to marginal cost. B) marginal benefit is greater than marginal cost by any amount. C) marginal cost is greater than marginal benefit. D) total benefit is greater than total cost. E) marginal benefit is greater than marginal cost by as much as possible.
As unemployment rose during 1930 through 1932 and the economy plunged into the Great Depression, policy makers
a. reduced tax rates and increased the money supply. b. increased tax rates and reduced the money supply. c. increased both tax rates and the money supply. d. reduced both the tax rates and the money supply.
In the European model the stakeholder plays a less prominent role than in the Anglo-Saxon model
a. True b. False
Which of the following is not a characteristic of pollution permits?
a. Prices are set by supply and demand. b. Allowing firms to trade their permits reduces the total quantity of pollution beyond the initial allocation. c. Real-world markets for pollution permits include sulfur dioxide and carbon. d. Firms for whom pollution reduction is very expensive are willing to pay more for permits than firms for whom pollution reduction is less expensive.