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. should be determined by the private market without any government intervention.
D. occurs at the point at which demand crosses the private cost supply curve.
Answer: B
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Suppose that the Federal Reserve conducts an open market sale. Everything else held constant, this will cause the demand for U.S. assets to ________ and the U.S. dollar will ________
A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate
In the simple Keynesian model, government spending
a. have a smaller multiplier than tax changes. b. can have a larger or smaller multiplier depending upon monetary policy c. have the same multiplier as changes in taxes. d. have a greater multiplier than tax changes.
The Fed is institutionally independent. A major disadvantage of this is that monetary policy
a. will always be coordinated with fiscal policy. b. is not subject to democratic control as other policies are. c. will never offset fiscal policy. d. cannot be changed once it has been instituted.
Under a monopoly, resources are misallocated such that
A) too few resources are used in other industries, and too many are used by the monopoly. B) too few resources are used by the monopoly, and too many are used elsewhere. C) resources are being used as efficiently as possible only by the monopoly. D) consumers are being forced to pay a price below the MC of the monopolist.