As the size of the MPC increases, the value of the balanced-budget multiplier

Apple Computer is more likely to continue to use input markets rather than manufacture its own inputs internally when

a. the quality of inputs is difficult to determine b. switching among input suppliers is easy c. there are very few firms producing the input d. the input is difficult to identify and define e. transaction costs go up

Suppose Jones's company and Smith's company both pollute. Under a system of marketable pollution permits, which of the following must be true in order for Smith and Jones to benefit from trading the right to pollute?

A. Smith and Jones must be able to reduce pollution at exactly the same cost. B. Smith and Jones must have different abatement costs. C. Smith and Jones must have a social conscience and must be devoted to pollution abatement. D. The government must direct Smith and Jones toward beneficial trades.