Two farmers, A and B, each apply 100 tons of manure on their fields. To reduce manure runoff, the government has decided to require a permit for each ton of manure applied. The government gives each farmer 50 tradeable permits. Farmer A incurs losses of $25 for each ton of manure he does not apply, and Farmer B incurs losses of $50 for each ton of manure he does not apply. After permit trading,
we would expect that
a. farmer A will no longer apply manure, and farmer B will not reduce his manure application at all.
b. farmer B will no longer apply manure, and farmer A will not reduce his manure application at all.
c. farmer A and B will each apply 50 tons of manure.
d. farmer A will apply 25 tons of manure, and farmer B will apply 50 tons of manure.
a
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The figure above shows the housing market in the city of Appleville. A rent ceiling of $650 per month is imposed. With the rent ceiling, the deadweight loss in the Appleville housing market is
A) zero. B) at least $15,000 per month. C) at most $7,500 per month. D) 300 units per month.
The view that union wage demands may be a source of inflation would be best associated with cost-push inflation
a. True b. False Indicate whether the statement is true or false
What characteristics distinguish private goods from public goods?
An economic boom predicts the new equilibrium wage would be:
A. higher because the labor demand curve shifts right. B. lower because the labor demand curve shifts right. C. lower because the labor demand curve shifts left. D. higher because the labor demand curve shifts left.