Using Scenario 1, calculate the total cost of pollution when both steel companies are allowed to pollute only one million gallons of thermal water each and the right is not transferable or tradable
What will be an ideal response?
The first million gallons is essentially "free" to each steel company. Therefore the old steel mill will dump 1 million gallons but will pay 25 cents on cleaning up the remaining 4 million gallons for a total cost of $1 million. The modern steel plant will also dump 1 million gallons of thermal water and will pay 5 cents on the remainder of 4 million gallons for a total cost of $200,000 . The combined cost of getting rid of the 8 million gallons of thermal water is $1,200,000 .
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An economy's long-run equilibrium is
A) the equilibrium that would occur if prices were perfectly flexible. B) the equilibrium that would occur if prices were perfectly flexible and always adjusted immediately. C) the equilibrium that would occur if prices were perfectly flexible and always adjusted immediately to preserve full employment. D) the equilibrium that would occur if prices were perfectly fixed to preserve full employment. E) the equilibrium that would occur if prices were perfectly fixed at the full employment point.
If some coffee drinkers continue to buy Maxwell House coffee even when Folger's coffee is on sale and cheaper, it may be a result of
a. irrational consumer behavior b. a high cross elasticity c. brand loyalty d. Maxwell House being a monopoly e. elastic demand
In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Induced expenditure equals:
A. 320 + 0.25Y. B. 0.75Y. C. 290 + 0.75Y. D. 0.25Y.
Which of the following is an example of scarcity?
A. Adam has more than enough food to eat each day. B. Benito is wealthy so he has everything he could ever want. C. Camden would like to have more designer clothes than he can afford. D. Dennis takes as many vacations as he would like since he won the lottery.