After the September 11th attack on the World Trade Center, and with the emergence of the anthrax scare, the price and the purchases of gas masks jumped dramatically in New York City. In the economic way of thinking, which of the following occurred?
A) The supply curve for gas masks shifted to the right.
B) The supply curve for gas masks shifted to the left.
C) The demand curve for gas masks shifted to the right.
D) The demand curve for gas masks shifted to the left.
E) The demand curve for gas masks became upward-sloping.
C
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If the firm in the figure above is unregulated, the consumer surplus will be
A) zero. B) $100. C) $400. D) $200.
Suppose that a powerplant is given a permit to pollute 10 tons of carbon into the atmosphere. As the powerplant operates, it can generate $200 of profit selling electricity per ton of carbon that it sends into the atmosphere. If the price of the carbon permit is $100 per ton, then:
A. the powerplant is better off shutting down and selling its permit. B. the powerplant is better off buying more permits and selling more electricity. C. the powerplant is better off selling electricity and using the permits to pollute 10 tons of carbon. D. the powerplant is better off shutting down and buying more permits.