Economists typically suggest three choices that allow a polluter to decide how to absorb most, or perhaps all, of the social costs of its actions, which are
A) continuing to overproduce the good, lowering the price of the good, or cutting output.
B) reducing the pollution-causing activity, changing production techniques, or paying a price to pollute.
C) installing pollution abatement equipment, paying to pollute, or just ignoring the issue.
D) paying a pollution tax, continuing to use existing production techniques, or continuing the polluting behavior without regard to the social implications.
B
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Because households have limited incomes, they must
a. rarely take vacations b. live below the poverty line c. allocate their spending carefully d. gamble in casinos frequently e. save for the future
Suppose labor and capital are the only two factors used by a firm to produce pencils. Which of the following statements is true of the average variable costs of this firm?
a. The average variable cost of this firm will be equal to the ratio of the cost of capital and the quantity of output produced by the firm. b. The average variable cost of this firm will be equal to the ratio of the total cost of production and the quantity of output produced by the firm. c. The average variable cost of this firm will be equal to the ratio of wages paid to the workers and the quantity of output produced by the firm. d. The average variable cost of this firm will be equal to the ratio of the quantity of output produced by the firm and the wages paid to the workers.
If the Fed wants to increase bank reserves, it can:
A. Buy bonds. B. Raise the discount rate. C. Raise the reserve requirement. D. Sell bonds.
A firm that has increasing marginal output would be experiencing __________.
Fill in the blank(s) with the appropriate word(s).