An efficient policy to reduce pollution would reduce pollution to the point where:
A. it is eliminated.
B. the marginal costs of reducing pollution equal the marginal benefits of reducing pollution.
C. the marginal costs of reducing pollution are greater than the marginal benefits of reducing pollution.
D. the marginal costs of reducing pollution are less than the marginal benefits of reducing pollution.
Answer: B
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As a method of resource allocation, market price
A) means those who are willing and able to pay get a particular good or service. B) works well when self-interest must be suppressed. C) works best inside firms and government departments. D) is efficient when there is no effective way to distinguish among potential users of a scarce resource.
The profit-maximizing price of the monopolist compared to the perfectly competitive industry in the above figure are, respectively
A) P1 and P3. B) P1 and P5. C) P1 and P2. D) P2 and P5.
The United States is a ________ nation because it pays ________ in interest to the rest of the world than it receives in ________ from the rest of the world
A) creditor; more; interest B) debtor; more; interest C) debtor; less; cash D) debtor; more; cash E) debtor; less; interest
Explain the permanent-income hypothesis and the life-cycle hypothesis. How are these hypotheses similar?
What will be an ideal response?