The optimal quantity of air pollution is
A) whatever amount of pollution is produced by the profit maximizing firm.
B) found by equating the marginal benefits from further reductions in pollution and the marginal costs of further reductions in pollution.
C) found by setting the quantity of air pollution equal to the quantity of water pollution.
D) a meaningless concept since monetary values cannot be attached to problems associated with pollution.
B
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Refer to Figure 9.3. If the government establishes a price ceiling of $1.00, producer surplus will
A) fall by $150. B) fall by $300. C) remain the same. D) rise by $150. E) rise by $300.
A principal feature of a command economy is that ____________
a. production decisions are made by profit-maximizing firms. b. there is a central planning board at the top, which transmits economic decisions down to the various producing and consuming units below. c. consumers are allowed to determine that is produced based on their demand for goods and services. d. regulatory agencies constrain the most egregious forms of market power in a market system of allocation.