A nation with cheap, efficient communications is likely to be
a. richer, ceteris paribus, because transaction costs will be lower and trade greater.
b. richer only if production of goods is cheaper, too, since trade itself cannot create value.
c. poorer since it spends so much on communication instead of true productivity.
d. spending too much on communications, which adds nothing to the value of output.
A
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Indicate whether the statement is true or false
Suppose the current price of a marketable permit to emit one ton of sulfur dioxide is $100 . If the marginal cost for a firm to reduce one ton of sulfur dioxide is $80, then:
a. the firm will buy the permit and emit one more ton of sulfur dioxide. b. the firm will reduce its emissions of sulfur dioxide by one ton. c. the firm will buy the permit and increase its emissions by 20 tons. d. the firm will shut down. e. the firm will be willing to pay up to $200 for a permit.