When consumers pay only a fraction of the true cost of medical services, their demand increases. The marginal cost of producing these extra services
A) is less than the marginal benefit consumers receive from them.
B) is equal to the marginal benefit consumers receive from them.
C) is greater than the marginal benefit consumers receive from them.
D) is zero due to the insurance payments.
C
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If a paper manufacturer does NOT bear the entire cost of the dioxin it emits, what will it do?
a) It will emit lower levels of dioxin than is socially efficient. b) It will emit higher levels of dioxin than is socially efficient. c) It will emit an acceptable level of dioxin. d) It will not emit any dioxin in an attempt to avoid paying the entire cost.
If the local pizzeria raises the price of a medium pizza from $6 to $10 and quantity demanded falls from 700 pizzas a night to 100 pizzas a night, the arc price elasticity of demand for pizzas is:
A) 0.67. B) 1.5. C) 2.0. D) 3.0.