This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope.
A state initiative requiring towns to spend at least $20 per day on litter removal would be ________ because ________.
A. efficient; it solves the inefficiency created by the negative externality
B. efficient; reducing litter is socially optimal
C. inefficient; the marginal cost of litter removal would exceed the marginal benefit
D. inefficient; $20 is insufficient to remove all of the litter
Answer: C
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In which system are decisions made by thousands of people who have information about resources, production technology and consumer desires?
A) market system B) socialist system C) centrally planned system D) command system
The above figure shows the demand for cable and the cable company's cost of providing cable
a. What price and quantity will be produced if the company is unregulated and profit maximizes? b. What price and quantity will be produced if the company is regulated using the marginal cost pricing rule? c. What is the advantage of the marginal cost pricing rule? d. What price and quantity will be produced if the company is regulated using the average cost pricing rule? e. What is the advantage of the average cost pricing rule?