Adjudication reduces problems created by negative externalities by
A) assigning liability to the party most able to pay (the deep pocket).
B) balancing marginal social benefits against marginal social costs.
C) discovering who has what rights.
D) making more accurate private benefit-cost analyses.
E) measuring externalities more precisely.
Ans: C) discovering who has what rights.
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The marginal cost of enforcement (MCE)
a. is the additional cost incurred by government to monitor and enforce abatement activity b. is a negatively sloped function c. can be measured as the vertical sum of MACmkt and MSC at any abatement level d. represents the horizontal sum of all polluters’ MAC functions
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
What is the best hope for reducing environmental pollution in less-developed nations?
A) limiting international trade B) boycott of polluting nation's products C) producing the goods in advanced, economically developed nations D) free international trade that raises incomes in less-developed nations E) strong international standards for pollution control
Why does the model of perfect competition imply that there will be an efficient allocation of resources among firms?
What will be an ideal response?