The optimal level of air quality will increase if
a. the cost of polluting increases
b. pollution is found to be self-absorbing
c. a new process allows pollution to be removed more cheaply
d. the marginal social cost of air quality increases
e. the marginal social benefit of air quality decreases
C
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In the long run, all factors of production are
A) variable. B) fixed. C) materials. D) rented.
Refer to the accompanying figure. Suppose the solid line shows the current demand curve for coffee. In response to an announcement that much of next year's coffee crop has been destroyed by a storm in Brazil, you should expect:
A. an increase in the quantity of coffee demanded, but no shift in the demand curve. B. neither a change in quantity demanded nor a shift in demand because next year's coffee crop will not affect the current demand for coffee. C. the demand curve to shift to D(A) in anticipation of higher future prices. D. the demand curve to shift to D(B) in anticipation of higher future prices.