A decrease in demand and an increase in supply will lead to
A) unambiguous increases in both price and quantity.
B) unambiguous decreases in both price and quantity.
C) an unambiguous decrease in price, but the effect on quantity is indeterminate.
D) an unambiguous decrease in quantity, but the effect on price is indeterminate.
C
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Answer the following statement(s) true (T) or false (F)
1. In a deposit-refund system, the deposit makes the polluter internalize the externality by absorbing the cost of any damage it might generate in advance. 2. To effectively internalize the externality, the deposit component of a deposit-refund system must raise the MPC of illegal waste disposal by the MECmeasured at the competitive output level. 3. Suppose that Firm 1 and Firm 2 face marginal abatement costs of MAC1 = 2.5A1 and MAC2 = 1.5A2, respectively, and that tradeable permits for pollution are issued such that a total of 20 units must be abated. If firm 1 abates 7.5 units, and firm 2 abates 12.5 units, then both firms have an incentive to trade. 4. If Firm X is abating 9 units with an MACX = 0.6AX, and Firm Y is abating 11 units with an MACY = 0.9AY, then Firm Y should do less of the abating and Firm X should do more in order to lower the overall costs of abatement.
The growth over time in the spread between price and marginal cost of an exhaustible resource is equal to
A) zero. B) one. C) the interest rate. D) the present value of the reserves.
While everyone wants a clean environment, it can be very hard to achieve. An approach governments could take to promote that outcome is to:
A. create social norms. B. create and enforce strict laws and heavy fines. C. influence individual's incentives. D. All of these are ways governments can get the "green" behavior they want.
An expansionary fiscal policy is used to close an inflationary gap
a. True b. False Indicate whether the statement is true or false