If the residents of a country specialize in a good in which they have a comparative advantage and trade with residents in another nation, the residents in the first country
A) can consume more than they could without trade.
B) will produce less than they could without trade.
C) will have a lower standard of living.
D) will be exploited by the second nation.
Answer: A
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Everything else held constant, if income tax rates were lowered, then
A) the interest rate on municipal bonds would fall. B) the interest rate on Treasury bonds would rise. C) the interest rate on municipal bonds would rise. D) the price of Treasury bonds would fall.
The marginal social benefit curve for water quality slopes downward because
a. the total benefit from clean water decreases as water becomes cleaner b. the added benefit from cleaner water is greater when water quality is poor than when water quality is high c. the added benefit from cleaner water is smaller when water quality is poor than when water quality is high d. the total benefit from clean water increases as water becomes cleaner e. people demand clean water at any price
Total cost of production is the sum of total variable cost and total fixed cost. If the total fixed cost alone decreases:
A. the average total cost curve shifts upward at all output levels. B. the marginal cost curve shifts downward at all output levels. C. the vertical distance between the average total cost curve and the average variable cost curve decreases at all output levels. D. the average variable cost curve shifts downward at all output levels.
Refer to the data provided in Table 16.1 below to answer the following question(s).Table 16.1 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution.Table 16.1Firm AFirm AFirm AFirm BFirm BFirm BReduction of Pollution by Firm AMC of reducing pollution for Firm ATC of reducing pollution for Firm AReduction of Pollution by Firm BMC of reducing pollution for Firm BTC of reducing pollution for Firm B1$4$41$8$82 610212203 9193163641332420565185052480Refer to Table 16.1. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. If firms are allowed to trade permits, how many permits
will be traded between the two firms? A. A will buy one permit from B. B. B will buy one permit from A. C. A will buy two permits from B. D. B will buy two permits from A.