If market signals result in pollution beyond the optimal level, then
A. The economy experiences government failure.
B. The government is allocating resources inefficiently.
C. The market mechanism has failed to achieve efficiency.
D. A laissez faire approach will reduce the level of pollution.
Answer: C
You might also like to view...
Define opportunity cost. A student who has just graduated from college has three job offers: the first job pays him $35,000 a year, the second job pays him $23,000 a year, and the third one pays him $15,000 a year
What is the student's opportunity cost of taking the first job?
An inflow of capital and a trade deficit are more dangerous when
a. the inflow of capital is channeled into private investment. b. the inflow of capital is used to finance current consumption and/or channeled into unproductive projects. c. the unemployment rate of the country is low, because this will mean the capital inflow will be inflationary. d. the investment rate is already high and the unemployment rate low.