Based on the model given, the cost-effective solution would arise if
Suppose that two firms, X and Y, face the following abatement costs:
MACX = 1.2AX, MACY = 0.3AY
TACX = 0.6AX2 TACY = 0.15AY2
Further assume that the combined abatement standard is 40 units for both firms.
a. each firm abates 20 units of pollution
b. firm X abates 8 units, and firm Y abates 32 units
c. firm Y does all the abating because its MAC is lower
d. firm X abates 24 units, and firm Y abates 16 units
e. none of the above
b. firm X abates 8 units, and firm Y abates 32 units
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Over a particular price range, if the quantity effect of a price decrease is smaller than the price effect, it implies that:
A) demand is elastic in the price range. B) demand is inelastic in the price range. C) the demand curve is horizontal in the price range. D) the demand curve is upward sloping in the price range.
At each point on an indifference curve:
A. money income is the same. B. the prices of the two products are the same. C. total utility is the same. D. marginal utility is the same.
The law of diminishing marginal product is responsible for
A) economies of scale. B) constant returns to scale. C) diseconomies of scale. D) none of the long-run relationships.
The net cost to society from prohibiting the operation of a competitive market in equilibrium is
A. a deadweight loss. B. lost producer surplus only. C. lost consumer surplus only. D. lost producer profits only.