Suppose that a paper producer dumps its waste into a local river. Explain why this situation is inefficient
What will be an ideal response?
Firms in perfect competition maximize profit by producing where price is equal to marginal cost. As long as the marginal cost represents the true opportunity cost of the resources used in production, the outcome is efficient. However, if a firm is dumping its waste into a river, and is not taking the cost of this resource into account, it will produce too much of the good.
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If an individual borrows $100, and pays back $100 after a year to settle his loan, it implies that the rate of interest is:
A) 0 %. B) 100%. C) 1%. D) 10%.
Due to ongoing drought conditions, many cities in Texas have implemented water conservation measures which prevent homeowners from watering their lawns more than two times per month. Prior to the drought conditions, no restrictions were in place
Discuss this measure from the villain/victim standpoint. Explain who the villains and victims are, and if they really are villains and victims?
A tavern is likely to have a ______________________ price elasticity of supply than does an antiques dealer due to ______________________.
A. more elastic; availability of inputs B. less elastic; availability of inputs C. less elastic; a longer adjustment time D. less elastic; a shorter adjustment time
Could the Fed impact the amount of borrowing in the federal funds market without changing their target for the federal funds rate? Explain.
What will be an ideal response?