A chemical-producing firm is located just upstream from an electric power plant. Instead of the more expensive procedure of burying its wastes, the chemical-producing firm begins dumping its waste into the stream. This causes increased variable costs for the power plant, which uses water from the stream to cool its turbines. The chemical producer's dumping of waste into the stream causes
A. Only the MC of the power firm to shift downward.
B. Only the MC of the chemical firm to shift upward.
C. The MC of the chemical firm to shift downward and the MC of the power company to shift upward.
D. The MC of the chemical firm to shift upward and the MC of the power company to shift downward.
Answer: C
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When looking back on past choices, some people feel they should have exercised more and eaten less. The fact that they could not make that choice at that point in time is an example of less than optimal choices resulting from the:
A. fact that the benefits and costs of choices are separated by time. B. complicated nature of the choice. C. market system within which we make choices. D. fact that we don't make food and exercise choices very frequently. D. market system within which we make choices.
Which of the following would decrease aggregate demand?
a) Increased consumption b) Increasing export revenue c) Increased taxation revenue d) Increased investment