Exhibit 30-3 Costs of Eliminating:Firm A Firm B Firm C 1st ton of pollution$ 30 $ 50 $ 600 2nd ton of pollution$ 70 $ 90 $ 700 3rd ton of pollution$125 $150 $ 900 4th ton of pollution$200 $250 $1,300 Refer to Exhibit 30-3. Suppose that Firms A, B, and C are the only polluters in the state and that each emits 4 tons of pollution into the atmosphere. To cut the level of pollution in half the government issues two transferable pollution permits to each firm. What is the total cost to society of decreasing pollution to half its present level if firm C buys one pollution permit from firm A and one pollution permit from firm B?
A. $515
B. $1,300
C. $1,380
D. $965
E. $10,350
Answer: A
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A) internal balance between them must be negative. B) internal balance between them might be negative or positive. C) internal balance between them must also be positive. D) internal balance between them would not exist.
The price of one good in relation to the price of another good is called:
A) absolute prices B) exchange rate C) relative prices D) none of the above
After a price ceiling of $8 is placed on the market in the graph shown, the total number of units traded:
A. falls by 8 relative to equilibrium.
B. falls by 15 relative to equilibrium.
C. falls by 23 relative to equilibrium.
D. increases by 15 relative to equilibrium.
What is the difference between real GDP and nominal GDP?
(A) Real GDP includes nonmarket activities; nominal GDP has no nonmarket activities. (B) Real GDP allows for depreciation; nominal GDP allows for no depreciation. (C) Real GDP is based on constant prices; nominal GDP is based on the current year's prices. (D) Real GDP is accurate to hundreds of dollars; nominal GDP is accurate to thousands of dollars.