Assume that emissions from electric utilities contribute to pollution in the form of acid rain. Which of the following describes how this affects the market for electricity?
A) The equilibrium in the market is not efficient; consumer surplus is equal to producer surplus.
B) The equilibrium in the market is not efficient; because of the cost of the acid rain, economic efficiency would be greater if more electricity were produced.
C) A deadweight loss occurs; at equilibrium the additional social cost of production is greater than the additional benefit to consumers.
D) The equilibrium in the market is not efficient; the marginal benefit from electricity is greater than the marginal social cost.
C
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Who pays the interest on government debt for the money it borrows today?
A) future generations of taxpayers B) the Congressional Budget Office C) the Federal Reserve D) The government does not pay interest on money it borrows.
In a simultaneous move game, ________
A) each player has to make his choice after knowing his rival's choice B) each player has to make his choice without knowing his rival's choice C) there is always more than one Nash equilibrium D) there is always more than one dominant strategy equilibrium