Why might a system of marketable pollution permits lead to a higher concentration of polluted areas than would a command-and-control system?
What will be an ideal response?
Under a command-and-control system, each firm (in each city) might be required to reduce pollution by say 20%, while under a system of marketable permits, half the firms might reduce pollution by 40% and the other half might not reduce pollution at all. Pollution will be more prevalent in cities with firms with high abatement costs.
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Keynesians have been critical of supply-side economics because it ignores
a. the natural rate of unemployment b. exogenous supply-shocks c. distributional issues. d. the costs of high inflation.
Monopsony firms will hire more workers than they would if the labor market were competitive
Indicate whether the statement is true or false
Suppose the U.S. and Japan can both produce airplanes and televisions and the U.S. has a comparative advantage in the production of airplanes while Japan has a comparative advantage in the production of televisions. Also suppose the U.S. has an absolute advantage in the production of both airplanes and televisions. The U.S. should
a. not trade airplanes or televisions with Japan. b. import airplanes from Japan and export televisions to Japan. c. export airplanes to Japan and import televisions from Japan. d. export both airplanes and televisions to Japan.
If the price rises and the total amount consumers spend on the good falls to zero, then demand must be
A. perfectly elastic. B. elastic. C. perfectly inelastic. D. inelastic.