Given the data in Table 9.5, if Firm A were to reduce pollution from 1,000 gallons of wastewater per day to 0 gallons per day, production costs:
A. would increase by $12.
B. would decrease by $12.
C. would not change.
D. cannot be calculated from the information given.
Answer: A
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When there are credit market frictions, Ricardian equivalence may not hold because
A) consumers cannot understand the implications of the government budget constraint. B) a tax cut in the present with a future increase in taxes works effectively like a loan. C) an increase in government saving is matched one-for-one by a decrease in private saving. D) social security is fully-funded.
Which of the following activities describes the opportunity cost of attending an economics class?
What will be an ideal response?
Outside lags for monetary policy occur because:
A. firms must change investment plans before monetary policy can be effective. B. it takes time to identify a problem. C. once a problem is diagnosed, it still takes time to implement policy changes. D. once changes are finally diagnosed and implemented, policies are immediately effective.
If price lies above the minimum point on the ATC curve, in the short run the firm should ________ and in the long run it should ________.
A. produce where MC = MR; exit the industry B. shut down; expand C. shut down; exit the industry D. produce where MC = MR; expand