The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth and protects humans from ultraviolet radiation. Output of this substance has been restricted by a licensing system where producers have to bid in the open market for licenses to produce them in specified quantities. This is an example of dealing with externalities by
A. voluntary compliance.
B. direct controls.
C. taxes.
D. cap-and-trade.
Answer: D
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If you had a windfall of $5,000 in the present time period and you save some of it, you're saving behavior would likely be due to the fact that
A. your indifference curves for present and future are horizontal. B. your marginal utility of present income falls as your income goes up. C. the extra income changes the slope of your time preference indifference curves making then steeper. D. your indifference curves for present and future income are vertical.
Disposable income equals:
a. Consumption minus saving b. Saving times consumption c. Consumption plus saving d. Saving divided by consumption
Macroeconomics focuses on the behavior of
A. Government agencies. B. The overall economy. C. Individual consumers. D. All of the choices are correct.
A movie costs you and your friend $15 each. After one hour of watching the movie, you have struggled to stay awake while your friend has been on Facebook and is also bored with the movie. You suggest that you and your friend leave the movie and go to the park. Your friend responds by stating that he is not going to waste his $15 that was previously spent on the movie. Your friend is considering:
A. an opportunity cost of the movie. B. the marginal benefit. C. the sunk cost. D. Total costs