Suppose a paper mill earns $1,000,000 in profits when it pollutes a river, and it can abate pollution at a cost of $A. The effects of the pollution are confined to a single farmer who earns $400,000 if the water he uses from the river is clean and $300,000 if it's polluted. What is the combined profit of both firms without abatement?
A. $1,300,000
B. $900,000
C. $700,000
D. $1,400,000
A. $1,300,000
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The area beneath a consumer's demand curve out to the quantity purchased represents
a. consumer's surplus. b. the region of mutual advantage. c. the total value of the consumer's purchases. d. the marginal value placed on the last unit consumed.
Which were among the important reforms of the banking system that resulted from the financial crisis of the 1920 and 1930s?
a. the Glass-Steagall Act b. the prohibition of interest payments on bank deposits c. the separation of commercial banking from investment banking d. All of the above are correct. e. Only a and c are correct.
Which of the following is characteristic of the corporate form of ownership?
a. unlimited liability b. easy transferability of ownership rights c. no divisible ownership rights d. absence of the principal-agent problem
Suppose you bought a Volkswagen Beetle for 12,000 euros, and $1 would buy 0.90 euros. You would find the cost of the car in dollars and cents by
A. dividing 12,000 by 1.11. B. dividing 1.11 by 12,000. C. dividing 12,000 by 0.90. D. dividing 0.90 by 12,000.