Which of the following statements is true?
A) Rational economic agents maximize more than just monetary income.
B) An individual does not require information to make optimal decisions.
C) The principle of optimization is only accurate when it comes to making monetary decisions.
D) It is not necessary to consider the risks of a particular alternative while making an optimal decision.
A
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A primary difference between the original and New Keynesian approaches is that in the original model nominal wages are ________, while for the New Keynesians nominal wages are ________
A) perfectly flexible, slow to adjust B) slow to adjust, perfectly flexible C) fixed, slow to adjust D) slow to adjust, fixed
Explain why the current abatement levels for the two sources do not achieve cost effectiveness.
Suppose that there are only two stationary sources in a given air quality region. The first source has been in existence for several years, while the second source is new. The following functions represent marginal abatement costs (MAC) for each polluting source: MACEX = 10.0 + 0.7A EX, MACN = 9.2 + 0.5A N, whereAEX is the percentage abatement level for the existing source, and AN is the percentage abatement level for the new source. Assume that the aggregate abatement standard (i.e., for the region as a whole) is set at 40 percent and that the two firms’ current abatement levels areAEX = 10 and AN = 30.