A flat fee pricing system for MSW services
Use the following forany or all of Questions 11 through 13 below. Consider the following model of the municipal solid waste (MSW) services market in the city of Houston.
MSC = 1.5 + 1.25Q MSB = 30 – 2.5Q
MEC= 0.75Q MEB= 0
whereQ is the number of trash containers serviced per household per month.
a. ignores the positively sloped MPC of MSW services
b. causes an underallocation of resources to MSW services
c. means that demanders pay nothing for MSW services
d. provides an incentive for waste reduction
a. ignores the positively sloped MPC of MSW services
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Active stabilization policy can be rationalized in the New Keynesian model because
A) it makes it possible to obtain zero inflation. B) the government knows best. C) it counteracts the influence of unions. D) it allows a faster return to economic efficiency.
The key difference between the Pareto optimality and Pareto superiority is that ______
a. Pareto optimality is incompatible with utilitarianism, while Pareto superiority is compatible b. Pareto superiority is superior to Pareto optimality c. Pareto optimality requires interpersonal utility calculations, while Pareto superiority does not d. Pareto optimality refers to a state of the world while Pareto superiority compares two states of the world