At a boundary choice:
A. the consumer purchases at least some of every good.
B. the consumer purchases no goods.
C. the consumer does not spend all of her income.
D. the consumer purchases some of at least one good but none of at least one other good.
D. the consumer purchases some of at least one good but none of at least one other good.
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Which of the following would shift the demand curve for autos to the right?
a. A fall in the price of autos. b. A fall in the price of auto insurance. c. A fall in consumers' incomes. d. A fall in the price of steel.
Suppose the installation of sound absorbing materials in the walls of an auto body shop would cost $4,000, and would generate $25,000 in increased property values for an adjacent neighbor. Completely reducing all noise would require extensive retrofitting, costing $100,000, and would generate $30,000 increase in property values for the adjacent neighbor. Thus there are net social benefits to
installing the sound-absorbing materials. Which of the following would be consistent with the Coase Theorem? a. If the area is zoned industrial and the shop has the right to emit noise, the efficient solution would be realized if the two parties negotiated and the neighbor bought sound-absorbing materials for the shop. b. If the area is zoned industrial and the shop has the right to emit noise, the efficient solution would be realized when the neighbor appealed to the EPA for regulations requiring zero noise emissions and thus complete retrofitting of the shop. c. If the area is zoned residential, and the neighbor has the right to a relatively quiet environment, the efficient solution would be realized by requiring the shop owner and the building owner to share the cost of reducing noise emissions to zero. d. If the area is zoned residential, and the neighbor has the right to a relatively quiet environment, the efficient solution would be realized by requiring the neighbor to completely retrofit the building to reduce noise emissions to zero.