Refer to Figure 4-3. If the market price is $3.00, what is the consumer surplus on the second ice cream cone?
A) $0 B) $0.50 C) $3.00 D) $5.50
A
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The opportunity cost of an activity means the:
a. amount of money the activity costs. b. number of hours that is required to engage in this activity. c. expected gains by engaging in the activity. d. amount of other things that must be sacrificed in order to engage in the activity. e. expected gains minus the expected costs of engaging in the activity.
A firm that generates pollution is illustrated in Figure 9.7. If the government would like to induce this firm to abate, or reduce, its pollution by A1 tons, it will impose a pollution tax equal to:
A. P1. B. P1 minus P3. C. P2. D. P2 minus P3.