A country that is half as productive at producing some goods as another country, but is one quarter as productive at producing others, will not be able to gain from trade

Refer to Figure 4-15. How much of the tax is paid by sellers?

A) $2 B) $5 C) $7 D) $12

Much of the nation's coal is extracted by strip mining. This process leaves a huge barren hole in the ground when complete, and the cost of replanting the trees is approximately $10 per ton of coal. Burning the coal for electricity causes air pollution. No one knows how much damage the air pollution causes, but we know that for another $10 per ton the power plant can be outfitted with a pollution

control device. What is one measure of the true social cost of coal fired electricity, in dollars per ton? a. Private marginal cost plus the $10 replanting charge. b. Private marginal cost plus the $10 emission control charge. c. Only the $20 of replanting and emission control charges, because the other costs are private, not social. d. Private marginal cost plus the $20 of replanting and emission control charges. e. In order to answer this question we need to know the dollar value of the pollution.