What is not true for a system of financial penalties for polluters?
A. Firms may be fined for pollution.
B. Firms might have to pay a tax for each unit of pollution created.
C. Firms would be encouraged to pollute less.
D. Firms are always guaranteed the permit to pollute.
Answer: D
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The average total cost curves for Plant 1, ATC0, and Plant 2, ATC1, are shown in the figure above. Over what range of output is it efficient to operate Plant 1?
A) 0-20 B) 0-25 C) 20-25 D) greater than 25
Suppose that in a perfectly competitive market, the market supply of a good increases. As a result, the individual firm's:
a. supply curve would shift outward and the firm would increase output. b. supply curve would shift inward and the firm would decrease output. c. average-total-cost curve would shift upward and the firm would increase output. d. marginal-revenue curve would shift upward and the firm would increase output. e. marginal-revenue curve would shift downward and the firm would decrease output.
When economists assume that people act rationally, it means they: a. make decisions based on complete and accurate information
b. make decisions that will not be regretted later on. c. make decisions based on what they believe is best for themselves using available information. d. make decisions based solely on what is best for society.
In order to maintain a fixed exchange rate when demand for a domestic currency falls, the government must:
a) use its foreign currency reserves to buy domestic currency. b) use domestic currency to buy more foreign currency. c) print more money to boost the money supply. d) reduce interest rates to attract more demand for domestic currency.