According to the law of increasing costs, as the United States expends more of its resources on reducing air pollution,
A. the quantity of other goods that must be given up for further reductions in air pollution will decrease.
B. the quantity of other goods that must be given up for further reductions in air pollution will increase.
C. the social cost of additional air pollution will increase.
D. there will be no change in the marginal cost of reducing air pollution.
B. the quantity of other goods that must be given up for further reductions in air pollution will increase.
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Rate of return regulation is equivalent to
A) average cost pricing rule. B) marginal cost pricing rule. C) maximizing consumer surplus. D) maximizing producer surplus.
If the government raised taxes and reduced government spending in order to reduce the budget deficit, monetary policy could accommodate this policy by
a. increasing money demand. b. increasing money supply. c. decreasing money supply. d. increase unemployment insurance.
Suppose Cournot duopolist firms operate with each having a cost of 30qi (i = 1,2 ) so that each firm's marginal cost is 30. The inverse market demand curve is P = 120 - Q where Q = q1 + q2. At the Nash-Cournot equilibrium, the total quantity, Q, is
A) 30. B) 45. C) 60. D) 90.
Many U.S. producers complain about limited access to the Japanese market. They say that they cannot export to Japan because Japanese import restrictions are so severe. Who gains? Who loses?
a. Everyone loses. b. Japanese producers gain, U.S. producers and Japanese consumers lose. c. Japanese producers and consumers gain, U.S. producers and consumers lose. d. Japanese consumers and U.S. consumers gain, Japanese producers lose e. Everyone gains.