Which of the following statements is TRUE about the optimal quantity of pollution?
A. Firms should be allowed to determine the profit-maximizing amount of pollution abatement.
B. Pollution abatement should continue up to the point where marginal cost equals the average total cost.
C. Trade-offs exist between producing a cleaner environment and producing other goods and services.
D. It equals zero.
Answer: C
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In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?
A. recession B. expansion C. trough D. peak
When decision rights are decentralized, typically
a. decisions are being moved to those with less of the relevant information b. decisions are being moved to those with stronger incentives to make good decisions c. decisions are being moved away from those with more of the relevant information d. decisions are being moved to those with weaker incentives to make good decisions
A vertical line always has a slope of one.
Answer the following statement true (T) or false (F)
When a family's income is low and it is spending more on consumption than it is receiving in income
A. some segment of the consumption function curve lies above the 45-degree line, indicating dissaving. B. the APC must be equal to the ratio of planned consumption expenditure to total saving. C. the APC must be increasing. D. the MPC must be zero.