When society produces the combination of goods and services on the PPF that it values the most highly, society has
A) achieved only production efficiency and definitely not allocative efficiency.
B) achieved only allocative efficiency definitely not production efficiency.
C) achieved both production efficiency and allocative efficiency.
D) achieved a free lunch.
E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency.
C
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A marketable permit
A) allows firms to pollute all they want without any cost. B) allows firms to buy and sell the right to pollute at government controlled prices. C) eliminates pollution by setting the price of pollution permits above the marginal cost of polluting. D) allows firms to buy and sell the right to pollute. E) is the Coase theorem solution to pollution.
According to the purchasing power parity, if the price level in the US rises relative to Mexico
a. The dollar will appreciate relative to the peso b. The dollar will depreciate relative to the peso c. There is no effect on either currency d. None of the above