A tax equal to the external cost on firms that emit pollutants would:
a. provide firms with the incentive to increase the level of activity creating the pollution
b. provide firms with the incentive to decrease the level of activity creating the pollution.
c. provide firms with little incentive to search for less environmentally damaging production methods.
d. not reduce pollution levels at all.
b
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The table above shows the total utility from the two goods Freddy likes to consume. Suppose that Freddy has already eaten 5 bags of Fritos. If he consumes one more bag, his marginal utility will
A) equal 40. B) equal 35. C) equal 15. D) depend on the price of the extra bag.
Consumer surplus is: a. the area underneath the demand curve
b. the total utility derived from consuming a good. c. the marginal utility of the last unit consumed multiplied by the number of units consumed. d. the difference between what consumers are willing to pay and what they are required to pay for a good.
In analyzing the market for a particular good, the most appropriate size of the market to consider
a. is the global market b. is a local market c. is a national market d. is a state-wide market e. depends on the purpose of the analysis
Consider a typical individual who owns the following financial instruments: A life insurance policy for $250,000; a certificate of deposit for $10,000; homeowner's and auto insurance policies; $50,000 in a mutual fund, and $150,000 in her pension fund at work. Which of these are instruments used primarily as stores of value and which are being used to transfer risk?
What will be an ideal response?