The above table shows marginal costs and marginal benefits of clean air in a particular industrial area. In the table, when the quantity of clean air is at 25 percent
A. the marginal benefit of clean air exceeds the marginal cost.
B. the quantity of clean air is optimal.
C. the quantity of polluted air is 25 percent.
D. the marginal benefit of clean air is less than the marginal cost.
Answer: A
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The above table gives data for the nation of South Hampton. There are no imports into or exports from South Hampton. The equilibrium level of real GDP is
A) $700 billion. B) $400 billion. C) $500 billion. D) $600 billion. E) $800 billion.
The rail system in Metropolis is a natural monopoly. If the government regulates the system by setting the fare equal to marginal cost, which of the following will be true?
a. Price and output will be higher than if the monopoly were unregulated. b. Price and output will be lower than if the monopoly were unregulated. c. Price will be lower and output higher than if the monopoly were unregulated. d. Price will be higher and output lower than if the monopoly were unregulated. e. Profit will be lower than if the monopoly were unregulated, but price and output could either increase or decrease.
Economic growth tends to be higher in a country that
A. has a low saving rate. B. has an undeveloped system of property rights. C. does not grant patents to investors. D. has an open economy that encourages the rapid spread of technology.
Free trade allows the people of a country to consume outside their production possibility frontier.
Answer the following statement true (T) or false (F)