It has been proposed that a government agency be charged with the responsibility for determining the amount of pollution which the atmosphere or a body of water can safely recycle, and sell these limited rights to polluters. What would be the advantage of such a market for pollution rights?
What will be an ideal response?
The quality of water or air can be maintained at some acceptable standard through economic incentives
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For a perfectly competitive sugar producer in Haiti, a short-run economic profit will occur if the price of each ton of sugar sold is
A) greater than the average total cost of producing sugar. B) equal to the average total cost of producing sugar. C) less than the average total cost of producing sugar. D) rising as more sugar is sold. E) greater than the marginal revenue of each ton of sugar.
The figure above shows the market for a good with an external benefit. If the market is competitive and the government takes no action, the equilibrium quantity of ________ units is inefficient because ________
A) 8; marginal benefit exceeds marginal cost B) 8; marginal cost exceeds marginal benefit C) 10; marginal cost exceeds marginal benefit D) 10; marginal social benefit exceeds marginal benefit E) 10; marginal external benefit exceeds marginal social benefit