Answer the following statement(s) true (T) or false (F)
1. Among the reasons that may explain why abatement standards are not set efficiently is imperfect information.
2. If an abatement standard is set to satisfy allocative efficiency on a national scale, that standard would not be optimal at the regional level unless the national MSB and MSC functions were identical to those at the regional level.
3. The command-and-control approach to environmental policy uses rules, emissions limits, and various incentive-based policy instruments.
4. According to the cost-effectivenesscriterion, all polluting sources would abate pollution to the point where their individual marginal abatement cost (MAC) levels were equal.
1. True
2. True
3. False
4. True
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In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the supply of dollars?
What will be an ideal response?
In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that
a. OPEC raised the price of crude oil in world markets. b. U.S. gasoline producers raised the price of gasoline. c. the U.S. government maintained a price ceiling on gasoline. d. Americans typically commuted long distances.
Exhibit 4-2 Supply and demand curves
The market shown in Exhibit 4-2 is initially in equilibrium at E1. Changes in market conditions result in a new equilibrium at E2. This change is stated as a(n):
A. increase in supply and an increase in quantity demanded. B. increase in supply and a decrease in demand. C. decrease in supply and a decrease in quantity demanded. D. increase in demand and an increase in supply.
Refer to the diagram, where S d and D d are the domestic supply and demand for a product and P c is the world price of that product. With a P c P t per-unit tariff, per-unit revenue received by domestic and foreign producers respectively will be:
A. P c and P a .
B. P a and P c .
C. P a and P t .
D. P t and P c .