Two cities face identical prices for their housing. City A decided to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville", in equilibrium, we expect to see
a. a compensating differential between the prices of housing between the two cities
b. the prices of housing in both the cities to be identical
c. The prices of housing in B to be higher
d. All of the above
a
You might also like to view...
Suppose a firm pollutes a river when it produces a product. To achieve the efficient amount of output, a government could impose a ________ that equals the ________ of the pollution
A) pollution charge; marginal social cost B) pollution charge; marginal external cost C) pollution tax; marginal social cost D) pollution tax; marginal external cost E) pollution subsidy; marginal social cost
If this pollution occurs, the market equilibrium with no government intervention extracts ________ natural gas than the efficient quantity and ________ a deadweight loss
A) less; does not create B) more; does not create C) less; creates D) more; creates
Which of the following is most likely to shift the demand curve for electricity to the left?
a. consumers becoming more energy conscious. b. an increase in income. c. a decrease in the price of electricity. d. an increase in the price of natural gas, a substitute source of energy.
Risk
What will be an ideal response?