If some firms internalize their external costs by being a cleaner and more "environmentally friendly" producers than other firms that do not, then which of the following offers the best and most complete description of this situation?
a. The environmentally friendly firm will be operating at a higher marginal and average cost than those firms that shift some costs to society in the form of external costs.
b. In a long-run competitive equilibrium in which consumers do not distinguish between environmentally friendly and standard producers, the environmentally producers will receive negative economic profits and be forced to change or exit.
c. Without regulations requiring firms to internalize their external costs, producers can only afford to be environmentally friendly if consumers reward them with a price premium.
d. None of the above is correct.
d
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The expenditure approach values ________ and the income approach values ________
A) goods and services at market prices; goods and services at factor prices B) services only at factor prices; goods only at market prices C) only goods at market prices; only services at factor prices D) goods and services at market prices; services at factor prices E) goods and services at factor prices; goods and services at market prices
Sensitivity analysis of the results may include the following with the exception of
A) stability over time analysis of the estimated multipliers. B) using homoskedasticity only rather than HAC standard errors. C) investigation of omitted variable bias. D) looking at different computations of the HAC standard errors.