Why is the optimal quantity of pollution not less than the point at which the marginal benefit equals the marginal cost?
A) The point of intersection occurs at a low level of pollution.
B) There are no external costs below that level.
C) Below that point firms will have to reduce the quantity that they are currently producing and lower the price.
D) Below that point the value that people place on less pollution is less than the cost of reducing the pollution.
D
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Refer to the above figure. The points between A and B are known as
A) a peak. B) a trough. C) an expansion. D) a contraction.
Suppose you observe that minor changes in supply seem to cause dramatic changes in price. You would conclude that
a. demand is unit elastic b. demand is elastic c. demand is inelastic d. demand is perfectly inelastic
Referring to Figure 34.1, the price that this promoter will choose will 
Figure 34.1
A. sell out the facility. B. be where the demand curve crosses the marginal cost curve. C. be such that there are many empty seats. D. be less than the marginal revenue.
If 400 apple pies are sold at $4 per pie, but 600 apple pies are sold at $3 per pie, we know: a. that the demand for pies is elastic over that price range
b. that the demand for pies is inelastic over that price range. c. that the demand for pies is unit elastic over that price range. d. nothing about the elasticity of demand.