Which of the following constitutes an external cost of driving an automobile?
A. insurance
B. pollution
C. license
D. fuel
Answer: B
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The contingent valuation method involves
a. constructing a hypothetical market b. designing a valid survey instrument to gather WTP data c. evaluating the truthfulness of responses d. all of the above e. (a) and (c) only
If $1,000 is placed in an account earning 8% annually, the balance at the end of seven years will be
A) $1,080. B) $1,560. C) $2,000. D) $1,714.
If advertising were used to strengthen brand loyalty, you would expect: a. demand for the product to become more elastic
b. consumers to become less sensitive to price differences among similar goods. c. firms to lower price in order to increase revenue. d. that consumer demand for related products would be unaffected.
Explain the economics of why the refund might be set higher than the deposit.
State officials are establishing a deposit/refund system for batteries. Marginal costs and benefits have been estimated to be: MPC = 5 + 0.5Q MPB = MSB = 20 – 0.5Q MSC = 5 + 0.7Q, whereQ is in millions, and the marginal cost and benefit values are in dollars per battery.