In principle, a cap-and-trade program would
A. lower the production costs of all firms.
B. raise the production costs of all firms.
C. cause firms to generate more pollution than their allowed limits.
D. cause firms to generate less pollution than their allowed limits.
Answer: D
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The economic problem is essentially one of deciding how to make the best use of
A. limited resources to satisfy limited wants. B. unlimited resources to satisfy limited wants. C. limited resources to satisfy unlimited wants. D. unlimited resources to satisfy unlimited wants.
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
A tax is proportional if, as a person's income rises, the
a. tax rate remains unchanged b. tax rate falls c. tax rate rises d. amount of the tax remains unchanged e. amount of the tax falls
Suppose the price elasticity of supply for Good A is 0.7 and the price elasticity of supply for Good B is 1.7 . Given these values, which of the following statements is accurate?
a. Good A has an inelastic supply curve, while Good B has an elastic supply curve. b. Good B has an elastic supply curve, while Good B has an inelastic supply curve. c. Both Good A and Good B have an elastic supply curve. d. Both Good A and Good B have an inelastic supply curve.