In the circular flow diagram, who owns the factors of production and consumes all of the goods and services produced?
households
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If the state uses a uniform standard, show that such a ruling would not be cost-effective. Which firm should be abating more, and which firm should be abating less?
Consider the environmental problem created by two paint companies that release chromium wastes into a nearby stream. The state authorities set a standard for the waterway that requires a combined abatement level (A) for chromium of 15 units. Suppose that the two firms, firm 1 and firm 2, face the following marginal abatement cost equations: MAC1 = 3.2A1 and MAC2 = 0.8A2, where costs are measured in thousands of dollars.
If a government price control succeeds in affecting price, it can be expected to lead to a corresponding
a. decrease in the quantity of sales only if the price is forced down. b. decrease in the quantity of sales if the price is forced down and an increase in the volume of sales if the price is forced up. c. decrease in the quantity of sales whether the price is forced up or down. d. increase in the quantity of sales whether the price is forced up or down.
The discount rate is
A. set in the money market. B. set by each member bank. C. set by the Federal Reserve District Banks. D. the same as the federal funds rate.
Using tariffs, quotas, or other barriers to trade to protect domestic jobs is called
A. offshoring. B. globalization. C. dumping. D. protectionism.