Under a system of marketable pollution permits:
A. firms with lower costs of reducing emissions are likely to sell permits to those with higher costs of reducing emissions.
B. environmentalists can decrease pollution by purchasing permits.
C. the government can decrease the amount of pollution to the desired level.
D. All of these are correct.
Answer: D
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Refer to Common Property II. Suppose the common property becomes privately owned. If the owner charges a competitive entrance fee for the right to use the property, social gain will equal
The following questions refer to the accompanying diagram, which shows the benefits and costs associated with the use of a common property.
a. area C + D + F + G + I.
b. area F + G + H + I.
c. area A + B + C + D + F + G + I.
d. area A + B + C + D + E + F + G + H + I.
Suppose that many corporations begin issuing new bonds. Everything else being equal, what is most likely to happen to the interest rate?
A. It will increase. B. It will decrease. C. It will not change. D. It will vary according to a random walk.
Refer to Table 11.1. If the marginal propensity to consume decreases to 0.05 (MPC = 0.05), what is the new equilibrium level of output?
A) 2,366.67 B) 3,166.67 C) 3,550.00 D) 4,750.00
A major side-effect of a stimulative fiscal policy is that it will
A) discriminate in favor of housing. B) crowd out private expenditures. C) increase the natural rate of unemployment. D) permanently raise the rate of inflation.