Pollution permit policies achieve an ________ outcome because ________.
A. efficient; firms that have the highest cost of reducing pollution will have the greatest incentive to purchase permits.
B. efficient; firms that have the lowest cost of reducing pollution will be able to pay more for each permit.
C. inefficient; wealthier firms can afford to purchase more permits.
D. inefficient; the supply of permits is set by the government, and so is perfectly inelastic.
Answer: A
You might also like to view...
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Which actor in the simplified circular flow model buys or rents land, labor, and capital?
A. Firms B. Households C. Markets for factors of production D. Government
Which of the following is an example of antitrust legislation?
a. a law that breaks up an oil monopoly b. a law that approves a subsidy for drug research c. a law that prevents price fixing in the CD industry d. a law that requires a construction firm to stop predatory pricing
Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that we observe Joe staying open 5 hours per day. If he is following the marginal principle, what must his marginal cost per hour be?
A. $16 B. $24 C. $32 D. $40