A "shock" is something that creates a shift in:
A. the supply curve only.
B. both the demand curve and the supply curve at the same time.
C. the demand curve only.
D. either the demand curve or the supply curve.
Answer: D
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On efficiency grounds, corrective taxes should not be given as compensation to those individuals harmed by negative externalities
a. True b. False
Fiona and Alicia divide their time equally between ironing shirts and cooking meals. Fiona can iron 5 shirts and cook 2 meals in an hour. Alicia can iron 6 shirts and cook 1 meal in an hour. If they have to iron 15 shirts and cook 5 meals, who should specialize in which activity?
a. Fiona should do all the work. b. Alicia should do all the work. c. Fiona should specialize in cooking meals and Alicia should specialize in ironing shirts. d. Alicia should specialize in cooking meals and Fiona should specialize in ironing shirts.
Suppose the 12-month interest rate on a U.S. Treasury bill is 16 percent, and the one-year interest rate on a comparable British Treasury bill is 6 percent. The exchange rate today is $2.00 per pound. What must be the expected exchange rate at maturity for interest rate parity to hold?
a. $1.00 = 0.50 pound b. $1.00 = 0.75 pound c. 1 pound = $2.20 d. 1 pound = $1.80 e. 1 pound = $2.50
If each firm’s production is associated with the release of 50 units of effluent, how much will each pay in total effluent fees when facing the $90 marginal effluent fee?
Among the identified point sources contributing to the pollution of Puget Sound are Dow Chemical (D) and Chevron (C). Each firm's cost functions are shown below. MACD = 2.5AD MACC = 3.75AC TACD = 1.25AD2 TACC = 1.875AC2 To meet the effluent limits under the Clean Water Act, each firm has an NPDES permit to release some fixed amount of effluents, so each must abate 30 units.