The consumption possibilities curve is the
A. indifference curve.
B. budget constraint.
C. supply curve.
D. demand curve.
Answer: B
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Refer to Pollutants. Suppose transactions costs are zero. Also suppose the chemical plant is not liable for the farm's crop damages and can continue to pollute the stream. What will be the result of private bargaining between the farm and the chemical plant?
A chemical plant's production adds pollutants to a stream which irrigates a farm's crops. The pollutants damage the farm's crops, increasing the firm's costs by $800 per month. The crop damage may be eliminated in two ways: the chemical plant can install a new filtering system costing $300 per month, or the farm can install a new irrigation system costing $600 per month. a. The chemical plant will pay the farm $800 per month in crop damages. b. The farm will bear the $800 per month cost of crop damages. c. The chemical plant will install the new filtering system. d. The farm will install the new irrigation system.
Which of the following is an example of a product that is excludable and nonrival?
A) a motorcycle B) the court system C) Western lowland gorillas D) a NASCAR event
How will an unanticipated decrease in aggregate demand influence equilibrium output in the goods and services market?
a. Output will increase, and the general level of prices will fall. b. Output will increase, and the general level of prices will rise. c. Output will decrease, and the general level of prices will rise. d. Output will decrease, and the general level of prices will fall.
Suppose that for a given good, demand decreases and supply decreases at the same time. If demand decreases by a greater amount than supply decreases, then equilibrium price __________ and equilibrium quantity __________ for that good
A) rises; rises B) rises; falls C) falls; rises D) falls; falls