Refer to the above figure. Suppose the marginal benefit and the marginal cost curves of pollution abatement are normally shaped. Suppose the equilibrium is for a factory in Los Angeles
What would happen if the same factory were in the middle of Nevada? A) The marginal cost curve (1 ) would shift to (2 ) and there would be no difference in the level of abatement.
B) The marginal cost curve (2 ) would shift to the left and there would be less abatement in Nevada.
C) The marginal benefit curve (4 ) would shift to the left and there would be less abatement in Nevada.
D) The marginal benefit curve (2 ) would shift to the right and there would be more abatement in Nevada.
C
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Wage contracts force businesses to adjust wages rather than employment in response to an unexpected change in aggregate demand
a. True b. False Indicate whether the statement is true or false
Why didn't the Fed's quantitative easing policies exert a stronger impact on aggregate demand and lead to a more rapid recovery during 2010-2012?
a. The low interest rates accompanying the policy failed to increase stock prices. b. Even though the Fed made additional reserves available to the banking system, the policy did not result in lower interest rates. c. The velocity of money increased, partially offsetting the impact of the Fed's low interest rate policy. d. The earnings of senior citizens and others from money market accounts, saving deposits, and other forms of savings fell, reducing their incentive to spend and thereby increasing aggregate demand.