Suppose the production of cotton causes substantial environmental damage because the pesticides used by cotton farmers often make their way into nearby rivers and streams, and are very harmful to fish and other wildlife. If cotton farmers do not have to pay for the environmental damage caused by the pesticides used to grow cotton, then the market equilibrium price will be ________ and the market equilibrium quantity will be ________.
A. inefficiently low; inefficiently high
B. inefficiently low; inefficiently low
C. inefficiently high; inefficiently low
D. inefficiently high; inefficiently high
Answer: A
Economics
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A) reduce the demand for regular vegetables. B) increase the demand for regular vegetables. C) have no effect on the demand for regular vegetables. D) have no effect on the quantity demanded of organic vegetables.
Economics
During the expansion phase of the business cycle
A) employment decreases. B) unemployment increases. C) production increases. D) income decreases.
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