Tradable pollution permits
a. have prices that are set by the government.
b. will be more valuable to firms that can reduce pollution only at high costs.
c. are likely to create a higher level of total pollution.
d. are less desirable than command-and-control policies to reduce pollution.
b
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If a firm finds that the wage rate (W) is less than the value of marginal product (VMP), then to maximize its profit the firm should hire
A) less labor, which will increase the VMP. B) more labor, which will decrease the VMP. C) no more or less labor, because profits are greatest when W < VMP. D) more labor, because hiring more labor will increase both W and VMP until they are equal.
A decrease in the price level will shift the money demand curve to the ________, causing the nominal interest rate to ________
A) right; increase B) right; decrease C) left; increase D) left; decrease