What is the highest price that a firm would be willing to pay for one marketable pollution permit?
A. an amount equal to the purchasing firm's marginal abatement cost
B. an amount equal to the social benefit of pollution reduction
C. an amount determined by supply and demand in the market
D. an amount equal to the selling firm's marginal abatement cost
Answer: A
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Which of the following effects takes place as a result of automatic stabilization?
A) extra tax revenues are generated in a boom B) tax revenues remain constant during a recession C) leakages increase during a recession, helping to stimulate the economy D) Both A and C are correct.
In the short run, the price level
a. will decrease if unit costs and markups both increase throughout the economy b. will remain stable if unit costs increase throughout the economy c. is unimportant in macroeconomics d. will increase if unit costs increase throughout the economy e. is determined by the Fed
The sign on a church in your neighborhood reads "All are welcome at Sunday Service.". Because the church has limited seating and is usually full, the Sunday Service is
a. a private good. b. a public good. c. a club good. d. a common resource.
A movie theater raises ticket prices from $12 to $14 in order to raise revenues. The theater's management is assuming the absolute value of the price elasticity of demand for tickets is
A. equal to 1. B. less than 1. C. infinity. D. greater than 1.