Factory A can reduce emissions at a cost of $150 per ton. Factory B can reduce emissions at a cost of $115 per ton. In a system in which the government issues transferable pollution right at a price of $200 per ton:
a. Factory A can profit from selling its pollution rights to Factory B.
b. Both firms have an incentive to buy pollution rights
c. Factory B can profit from selling its pollution rights to Factory A.
d. Both firms have an incentive to sell pollution rights.
d
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Refer to Figure 2-14. Which country has a comparative advantage in the production of snow cones?
A) Greenland B) They have equal productive abilities. C) Iceland D) neither country
A perfect monopoly:
A. can be a single seller or small group of firms. B. can offer a product at the lowest cost possible. C. controls 100 percent of the market for a product. D. always engages in price discrimination.
If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally (shift rightward) by $1,000 billion and cause inflation. If the marginal propensity to consume is 0.90, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:
a. government spending by $100 billion. b. taxes by $100 billion. c. taxes by $1,000 billion. d. government spending by $1,000 billion.
The observed correlation between baldness and heart disease demonstrates that:
A) being bald causes a man to have heart disease. B) being bald actually makes heart disease less likely. C) bald men are generally unreliable. D) there is probably some other factor that causes both baldness and heart disease.