The legal system imposes large financial penalties on firms caught violating Environmental Protection Agency guidelines. The EPA’s standards program is thus an example of a
A. market-based approach to reducing pollution.
B. system of emissions taxes.
C. system of emissions permits.
D. direct-control system enforced through the courts.
Answer: D
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Which of the following would be classified as a variable cost for the local Texaco station?
A) interest payments to a local bank for a 5-year loan B) the total wages paid to the workers who are all paid $16.00 per hour, no matter how many hours they work each week C) the premiums paid for liability insurance, which are constant throughout the life of the contract D) the opportunity cost of money used to finance the installation of some new pumps
Goods whose benefits to society are not diminished as more people consume them and whose benefits cannot be withheld from anyone are:
A. impossible since resources are limited. B. examples of negative externalities. C. public goods. D. food and other necessities.
If the covered interest differential is zero, then
A. covered international investments will be profitable once we add in the interest earned on the foreign bonds. B. a currency is at a forward premium by as much as its interest rate is higher than the interest rate in the other country. C. covered interest rate parity has not yet been reached. D. the overall covered return on a foreign-currency investment equals the return on a comparable domestic-currency investment.
Which of the following is a common mistake consumers commit when they make decisions?
A) They take into account nonmonetary opportunity costs but ignore monetary costs. B) They are overly pessimistic about their future behavior. C) They fail to ignore sunk costs. D) They sometimes value fairness too much.