Suppose you are an economic researcher, and you have access to detailed information about all of the firms in a given geographic area. You would conclude that the pollution reduction policy in that area is efficient if you observe that:
A. the cleanest firms are also the most profitable.
B. all firms produce approximately the same amount of pollution.
C. all firms currently use the same pollution reduction technology.
D. the marginal cost of reducing pollution is the same for all firms at current emissions levels.
Answer: D
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In the figure above, the quantity of sugar beets produced is ________ million tons per year, and the quantity bought by consumers is ________ million tons per year
A) 30; 20 B) 20; 30 C) 25; 20 D) 20; 25 E) 25; 25
Economists criticize monopolies because monopolies
A) always price discriminate. B) receive accounting profits. C) restrict output and raise prices compared to a competitive situation. D) make consumers pay more for their product than the customers value the product.
Suppose the production of helicopters is an industry characterized by increasing returns to scale and an Argentine firm, Cicare, is the only player in this market. The firm caters to the global market and earns a profit of $10 million. Flettner, a German firm has been considering entering this market for a while, but it is aware that its entry will cause each firm to lose about $4 million
Although a government subsidy allows Flettner to enter the helicopter market, the company is unable to reap profits in the long run. Which of the following could have led to this outcome? a. Flettner experienced high production costs due to inadequate supply of inputs. b. New firms had entered the helicopter industry. c. The German government ran a balance of payment deficit. d. The Argentine government retaliated by subsidizing Cicare. e. There was very low investment in research and development in this industry.
Increased levels of consumption:
a) Shift aggregate supply outwards so more is supplied at each price b) Shift aggregate supply inwards so less is supplied at each price c) Shift aggregate demand outwards so more is demanded at each price d) Shift aggregate demand inwards so less is demanded at each price