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Nobody likes pollution (or crime, or accidents)! But economists, as they so often do, bring a different perspective to the issue of pollution. Assume that a paper plant dumps the chemicals it uses in making paper into the river it is located next to, polluting the river for downstream users. The paper plant operates in a perfetly competitive market ( the price it charges for its products equals its average total cost of production, not counting the costs of pollution, and it earns only a normal profit on its business.)
1) Who loses and who gains from the pollution caused by this plant?
2) Explain why the economist says that it doesn't make sense to reduce the amount of pollution to zero. What is the "optimal" amount of pollution?
3) The U.S. adopts strict pollution controls, forcing paper plants either to clean up their pollution or pay a heavy fine. But Canada refuses to adopt such a rule. What problem does this create?
Stigler argued that the variation in fees increases as buyer information decreases. Suppose you observe that each seller in a market is charging the identical price. What potentially conflicting inferences can you draw?
The Immediate lyric Division accused Microsoft of forcing consumers to buy Internet Explorer whenever they bought Windows
Institutions that function to connect one individual's savings another's investment decisions is in summation called the. Suppose the market interest rate for loanable funds is above the equilibrium level, this means the quantity of loanable funds: B..
Illustrate what are some of the downside risks also potential problems involved when using fiscal policy.
Both the long-run aggregate supply curve and the short-run aggregate supply curve shift in response to changes in the availability of labor or capital or to changes in technology and productivity. A widespread temporary change in the prices of factor..
Some people are saying which majority of the budget deficit are funds which some branches of the government owe to other branches.
According to the law of diminishing marginal returns, which of the following is true?
Menu costs arise from the way inflation: Unit-of-account costs arise from the way inflation makes... Shoe-leather costs arise from the way inflation..
An increase in the interest rate is expected to cause the optimal level of human capital investment for an individual to:
Pick a brand. Assess its efforts to manage brand equity in the last five years. What actions has it taken to be innovative and relevant? Can you suggest any changes to the company’s marketing program?
How much profit does an unregulated monopolist earn? How much profit would be earned if MC pricing were imposed?
Use the principles of supply and demand to address a predetermined goal (set by the student). Be clear on what the current market indicates and why and what your future goal is. We will probably revisit some of your choices in future modules.
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