Suppose the current price of a marketable permit to emit one ton of sulfur dioxide is $100 . If the marginal cost for a firm to reduce one ton of sulfur dioxide is $80, then:
a. the firm will buy the permit and emit one more ton of sulfur dioxide.
b. the firm will reduce its emissions of sulfur dioxide by one ton.
c. the firm will buy the permit and increase its emissions by 20 tons.
d. the firm will shut down.
e. the firm will be willing to pay up to $200 for a permit.
b
Economics
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Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's total variable cost?
A) $2,400 B) $2,000 C) $1,600 D) $800
Economics
Excessive volatility refers to the fact that
A) stock returns display mean reversion. B) stock prices can be slow to react to new information. C) stock price tend to rise in the month of January. D) stock prices fluctuate more than is justified by dividend fluctuations.
Economics