One of the reasons why firms pollute the air is that
A. use of the air is not easily excludable.
B. use of the air is costless to society.
C. use of the air is excludable.
D. moral hazard creates incentives to pollute the air.
Answer: A
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Which of the following is true about advertising by a firm?
a. It is not always successful in increasing demand for a firm's product. b. It attempts to increase demand and to make demand more inelastic. c. It may reduce per unit costs of production when economies of scale are experienced. d. All of these.
Figure 34.2 illustrates two labor supply curves. If in-kind payments become less available in this economy and marginal tax rates decrease significantly, we would expect a shift from
A. S2 to S1 and a movement up S1. B. S2 to S1 only. C. S1 to S2 only. D. S1 to S2 and a movement up S2.