In economic analysis, the optimal level of pollution
A) is always zero.
B) arises at the point at which the marginal benefit from further reduction equals the marginal cost of further reduction.
C) occurs at the point at which demand crosses the private cost supply curve.
D) should be determined by the private market without any government intervention.
Answer: B
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A tax on a specific good or service is called an ad valorem tax
a. True b. False
A firm that practices group price discrimination will set the lower price in the market that has the most elastic demand
Indicate whether the statement is true or false
A common good:
a. is rivalrous in sonsuption and excludable b. is nonrivalrous in consumption and nonexcludable c. will tend to be over consumed d. both a. and c.
Suppose that a powerplant is given a permit to pollute 10 tons of carbon into the atmosphere. As the powerplant operates, it can generate $200 of profit selling electricity per ton of carbon that it sends into the atmosphere. If the price of the carbon permit is $300 per ton, then:
A. the powerplant is better off shutting down and selling its permit. B. the powerplant is better off buying more permits and selling more electricity. C. the powerplant is better off selling electricity and using the permits to pollute 10 tons of carbon. D. the powerplant is better off shutting down and buying more permits.