Based on this model, if the government uses a uniform standard
Suppose that two firms, X and Y, face the following abatement costs:
MACX = 1.2AX, MACY = 0.3AY
TACX = 0.6AX2 TACY = 0.15AY2
Further assume that the combined abatement standard is 40 units for both firms.
a. the total abatement cost for firm X is $24
b. the total abatement cost for firm Y is $12
c. the combined total abatement cost for both firms is $1,200
d. the combined total abatement cost for both firms is $300
d. the combined total abatement cost for both firms is $300
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If there is a basic surplus and a negative total deficit, then
A) interest cost > basic surplus. B) interest cost < basic surplus. C) interest cost > positive total deficit. D) interest cost < positive total deficit.
Suppose you are asked to use the standard time trade-off approach to measuring quality of life and are given the following information. An individual is faced with living the remaining 10 years of her life suffering from severe osteoporosis. She reveals that she would be willing to give up four of those years to live the remaining six in perfect health. What is the utility of one year in the
chronic health state relative to perfect health? a. 4 b. 6 c. 0.4 d. 0.6 e. There is not enough information to determine the utility of life in this case
Explain how the free-market mechanism adjusts prices so that resource allocation is economically efficient.
What will be an ideal response?
Why does the price level in a perfectly competitive market move toward the zero-profit point?
a. Because firms enter and exit the market in response to gains and losses b. Because short-run losses reverse the effects of long-run gains c. Because profitable firms increase short-run productivity d. Because firms operate below the average cost curve