In the short run, a monopolistic competitor

If money wages increase, the most likely result is a(n)

a. increase in aggregate supply. b. decrease in aggregate supply. c. steeper aggregate supply curve. d. flatter aggregate supply curve.

Compared to taxing pollution, an advantage of auctioning pollution permits is that:

A. it allows the public to directly reduce pollution by purchasing permits. B. it ensures that all firms reduce pollution by the same amount. C. the largest reductions in pollution are made by the firms that can do so the most cheaply. D. auctioning permits raises revenue for the government.