Refer to Figure 5-8. Suppose the emissions reduction target is currently established at 8 million tons. Should society undertake to reduce an additional 1 million tons so that the total reduction is 9 million tons?
A) No, because there is a net cost represented by the area B + C.
B) Yes, because toxic fumes are dangerous and must be eliminated at any cost.
C) No, because the firms will pass the additional cost on to consumers.
D) Yes, because the marginal benefit exceeds the marginal cost at 8 million tons.
D
You might also like to view...
To calculate the J-statistic you regress the
A) squared values of the TSLS residuals on all exogenous variables and the instruments. The statistic is then the number of observations times the regression R2. B) TSLS residuals on all exogenous variables and the instruments. You then multiply the homoskedasticity-only F-statistic from that regression by the number of instruments. C) OLS residuals from the reduced form on the instruments. The F-statistic from this regression is the J-statistic. D) TSLS residuals on all exogenous variables and the instruments. You then multiply the heteroskedasticity-robust F-statistic from that regression by the number of instruments.
One of the primary functions of markets could be labeled
a. stimulation. b. coordination. c. planification. d. decentralization.