According to most economists, which one of the following would be the best public policy?
A. Require businesses to reduce pollution by a level prescribed by the government.
B. Zero tolerance for pollution.
C. Rely on private enterprise to reduce pollution as it is ultimately in its best interest.
D. Provide business firms with incentives to curb their pollution.
D. Provide business firms with incentives to curb their pollution.
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Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. Bobby currently buys 6 pizzas and 2 CDs. To maximize his utility, he should
A) buy more pizza and fewer CDs. B) buy more CDs and fewer pizza. C) buy more of both goods. D) stay with the current combination of goods.
For productive efficiency to hold
A) average variable cost is minimized in production. B) average total cost is minimized in production. C) price must equal the marginal cost of the last unit produced. D) price must equal marginal revenue of the last unit sold.
In the above figure for a monopolistically competitive firm, the total economic profit at the profit-maximizing point is
A) $0. B) $240. C) $360. D) $300.
Economists assume that firms seek to
a. maximize accounting profit b. maximize economic profit c. maximize total revenue d. maximize normal profit e. minimize cost