The Commons Problem arises because
A) firms don't maximize profits.
B) social and private incentives are not aligned and property rights are missing.
C) social cost equals private cost and property rights are missing.
D) social benefit equals private benefit and property rights are missing.
B
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If the marginal benefit of reducing emissions of some air pollutant is greater than the marginal cost
A) the marginal benefit will rise and the marginal cost will fall as further reductions are made. B) private businesses, rather the consumers, should be made to pay for the cost of further reductions. C) further reductions will make society better off. D) economic efficiency will be achieved when emissions are reduced to zero.
Explain how economic profits are reduced to zero as new firms enter a monopolistically competitive industry
Suppose the probability of a near-new car being good is 0.4 while its probability of being a lemon is 0.6 . If risk-neutral consumers are willing to pay $14,000 if the car is in good condition and $8,000 if it is a lemon, a risk averse buyer who knows those probabilities would be willing to pay $10,400 for the car
Indicate whether the statement is true or false
When a country takes a multilateral approach to free trade, it
a. removes trade restrictions on its own. b. reduces its trade restrictions while other countries do the same. c. does not remove trade restrictions no matter what other countries do. d. is willing to trade with multiple countries at once.