Would the Waxman-Markey law achieve production efficiency?
What will be an ideal response?
Production efficiency requires producing on the PPF. Use a PPF showing the tradeoff between electricity and clean air. Production efficiency requires producing on the PPF so that gaining more clean air means giving up some electricity. Before the new law, production might have been on the PPF if the producers had used the most efficient technologies and taken account of the pollution they created. After the law is in place, production might be within the PPF if the law requires more production of energy from renewable sources than is production efficient.
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A situation in which the long-run average total cost of production falls as the quantity of output increases is called increasing returns to scale
a. True b. False Indicate whether the statement is true or false
What occurs in the second stage of economic development?
A. The manufacturing sector declines in importance. B. Most of the labor force works in agriculture. C. The service sector shrinks in its relative size. D. Manufacturing gains in importance and employs a large portion of the labor force.