A restaurant that has market power can
a. minimize costs more efficiently than its competitors.
b. influence the market price for the meals it sells.
c. reduce its marketing budget more than its competitors.
d. ignore profit-maximizing strategies when setting the price for its meals.
b
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The optimal quantity of pollution is: a. zero
b. the level where the marginal cost of pollution abatement exceeds the marginal benefit of pollution abatement by the greatest amount. c. the level where the marginal benefit of pollution abatement exceeds the marginal cost of pollution abatement by the greatest amount. d. none of the above.
Explain how a higher rate of return on saving could, at least in theory, lead to lower saving
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Suppose that you rent a house next to a factory. The factory legally emits a chemical into the air that smells like feet. You now have to spend $300 more per month on air fresheners because the firm pollutes the air. You could move to another house far enough away from the factory, but the rent for that house is $200 more than you now pay. The efficient solution to this problem is that
A. the firm should be able to continue to pollute because only one person is being harmed by the factory's pollution. B. the factory owner should compensate you $300 so that you can pay for the additional expenses you incur. C. you should move to the new house because the additional rent on that new house is less than the additional expenses you incur from living next to the factory. D. the factory owner should reimburse you $100, the difference between your expenses and the higher rent on the new house.