If pollution is reduced below the socially efficient level:
a. the marginal cost of pollution abatement exceeds the marginal benefit of pollution abatement
b. the marginal cost of pollution abatement is less than the marginal benefit of pollution abatement.
c. the marginal cost of pollution abatement equals the marginal benefit of pollution abatement.
d. nothing can be said about the relationship between the marginal cost and marginal benefit of pollution abatement.
Answer: a. the marginal cost of pollution abatement exceeds the marginal benefit of pollution abatement
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Between two indifference curves, the one on the right indicates:
A) the same level of utility as the one on the left. B) the same bundle of goods as the one on the left. C) a higher level of utility than the one on the left. D) a lower level of consumer income than the one on the left.
IMF conditionality refers to the
A) technical assistance the IMF gives. B) minimum size of a national debt problem that a country must have before the IMF gets involved. C) minimum-sized loan the IMF will make. D) maximum-sized loan the IMF will make. E) changes a country must make in order to receive IMF financial assistance.
In the context of portfolio diversification,
A) investors are compensated for diversifiable risk in the portfolio. B) prudent investors should hold about three to five stocks in their portfolio. C) a stock index mutual fund is a financial intermediary that offers small investors a way to participate in the performance of the stock market as a whole. D) financial intermediaries make it more difficult to be diversified.
Refer to Figure 7.6. Which graph represents constant returns to scale?
A. A
B. B
C. C
D. Both graph A and graph C