The optimal quantity of air pollution is
A. a meaningless concept since monetary values cannot be attached to problems associated with pollution.
B. found by equating the marginal benefits from further reductions in pollution and the marginal costs of further reductions in pollution.
C. whatever amount of pollution is produced by the profit maximizing firm.
D. found by setting the quantity of air pollution equal to the quantity of water pollution.
Answer: B
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Recently, Chrysler bonds with a face value of $100 closed at $103. The coupon rate was 12.75 percent. The current yield on these bonds was
A. 103 percent. B. 3 percent. C. 12.75 percent. D. less than 12.75 percent.
Liabilities of the commercial banking system include:
A. loans and deposits. B. reserves and deposits. C. reserves and loans. D. deposits.
In general, a formula that a central bank uses to set interest rates in response to changing economic conditions is called a
A) rate-of-return equation. B) Taylor rule. C) central bank reaction function. D) market adaptation identity.
If the expansion of output in an industry leads to unchanged resource prices, the industry is most likely to be a(n):
a. decreasing cost industry. b. increasing cost industry. c. constant cost industry. d. industry characterized by economies of scale.