Firms that emit toxins into the air:
a. underproduce because the private cost of production exceeds the social cost.
b. overproduce because the social cost of production exceeds the private cost.
c. produce the same as nonpolluting firms.
d. produce at the socially optimal amount.
b
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Opportunity cost is defined as the
A) total value of all the alternatives given up B) highest-valued alternative given up C) cost of not doing all of the things you would like to do. D) lowest-valued alternative given up
If workers and firms expect that inflation will be 3 percent next year, and real wages are not changing over time, by how much will nominal wages increase?
A) more than 3 percent B) 3 percent C) less than 3 percent D) depends on actual inflation for next year
What is the primary threat of monopoly and oligopoly to the public interest?
a. Cartels b. Predatory pricing c. Price wars d. Monopoly power
Which of the following is not correct?
a. Economists who argue that labor taxes are highly distorting believe that labor supply is fairly elastic. b. Economists who argue that labor taxes are not highly distorting believe that labor supply is fairly inelastic. c. Economists who argue that labor supply is fairly inelastic cite elderly workers who adjust the date they retire as an example. d. Economists who argue that labor supply is fairly elastic cite workers who adjust the hours of overtime that they work as an example.