If pollution coming from factories is bad, then why would the socially optimal level of pollution not be zero?
A. because there are significant social costs of achieving zero pollution
B. because there are significant social benefits from attaining zero pollution
C. because the factories are privately owned in a market system
D. because there are zero benefits from zero pollution
Answer: A. because there are significant social costs of achieving zero pollution
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Use the figure below to answer the following question. The equilibrium point in the market is the point at which the S and D curves intersect.
Assuming equilibrium price P1, producer surplus is represented by areas
A. a + b. B. a + c. C. a + b + c + d. D. c + d.
The figure above shows the supply curve for soda. The market price is $1.00 per soda. The ________ price that must be offered so that the 10,000th soda is produced is ________
A) minimum; $0.50 B) minimum; $1.00 C) maximum; $0.50 D) maximum; $1.00 E) minimum; more than $0.50 but less than $1.00
What is the principal-agent problem?
A) It is a problem caused by a person (principal) who hires an agent to act on his behalf but is unwilling to delegate authority to the agent to carry out the task in the best possible way. B) It is a problem of the power system of boss and subordinate where the boss (principal) exerts influence over his subordinates (agents) using punishment or threat. C) It is a problem that exists when a person (principal) has more information about the task than the agent he hires to perform the task. D) It is a problem caused by agents pursuing their own interests rather than the interests of the principals who hired them.
Economic fluctuations in the United States have been less extreme since the 1950s
a. True b. False Indicate whether the statement is true or false