Suppose you are an economic researcher, and you have access to detailed information about all of the firms in a given geographic area. You would conclude that the pollution reduction policy in that area is efficient if you observe that:
A. all firms currently use the same pollution reduction technology.
B. all firms produce approximately the same amount of pollution.
C. the cleanest firms are also the most profitable.
D. the marginal cost of reducing pollution is the same for all firms at current emissions levels.
Answer: D
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(A) It has become more equal. (B) It has become less equal. (C) It has not changed appreciably. (D) It became more equal for about 10 years but has become less equal.
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Slope of the PPF between 2 points
What will be an ideal response?