The vertical intercept of the consumption function equals ________ and the slope equals ________.
A. autonomous consumption; the mpc
B. the mpc; autonomous consumption
C. the planned component of consumption; the unplanned component of consumption
D. the unplanned component of consumption; the planned component of consumption
Answer: A
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What is the rationale behind a cap-and-trade emission allowance system?
A) It creates a market for externalities. B) It disciplines polluting firms by specifying the maximum amount of emissions allowed and gives them permits to pollute up to their allowance. C) It provides firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance. D) It raises revenue for the government through the sale of permits.
Suppose you are an economic researcher, and you have access to detailed information about all of the firms in a given geographic area. You would conclude that the pollution reduction policy in that area is efficient if you observe that:
A. the cleanest firms are also the most profitable. B. all firms produce approximately the same amount of pollution. C. all firms currently use the same pollution reduction technology. D. the marginal cost of reducing pollution is the same for all firms at current emissions levels.
When no output gap exists actual output ________ potential output and the rate of inflation will tend to ________.
A. exceeds; increase B. equals; remain the same C. exceeds; decrease D. is less than; decrease
When economic rent exists
A. resources are allocated efficiently. B. the price is equal to the opportunity cost of the resources. C. price is the same as the discount rate. D. resources are allocated inefficiently.