Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 10, Problem 3MCQ
To determine
To choose:
The option that correctly explains the effect of an unregulated paint factory polluting a river.
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Cap and trade is a __--- based plan. A
limit is placed on emissions and prices are
established in emissions permit markets.
Emission taxes are a
based
policy. A fee on emissions is set and the
quantity of emissions is adjusted as
polluters react to the fee.
a. behavior; technology
b. technology; behavior
c. quantity; price
d. price; quantity
What is the term used to describe the situation where resources are allocated in a way that maximizes total surplus? A. Pareto efficiency B. Market equilibrium C. Social welfare D. Deadweight loss
B. Let’s consider the market for flour in a different town. Assume that it is efficient (i.e. that there are not external costs to producing flour, and no external benefits from consuming it).
Price ($/lb)
Quantity Supplied (thousands of lbs per day)
Quantity Demanded (thousands of lbs per day)
1.5
8
14
2
9
13
2.5
10
12
3
11
11
3.5
12
10
4
13
9
What is the price and quantity of flour sold without government intervention. Graph this equilibrium. XXXX
2. Suppose that, alarmed by the inability of many poorer consumers to buy flour, the government institutes a $2/lb price ceiling. How much flour will suppliers wish to sell, and how much will buyers demand? How much flour will actually be sold? Show this outcome on the same graph you drew for question 1. XXXX
3. Describe, in one sentence each, three problems that this policy might create? Please do not simply copy down phrases from the textbook, but instead describe ways that…
Chapter 10 Solutions
Foundations of Economics (8th Edition)
Ch. 10 - Prob. 1SPPACh. 10 - Prob. 2SPPACh. 10 - Prob. 3SPPACh. 10 - Prob. 4SPPACh. 10 - Prob. 5SPPACh. 10 - Prob. 6SPPACh. 10 - Prob. 7SPPACh. 10 - Prob. 8SPPACh. 10 - Prob. 9SPPACh. 10 - Prob. 10SPPA
Ch. 10 - Prob. 1IAPACh. 10 - Prob. 2IAPACh. 10 - Prob. 3IAPACh. 10 - Use the following information to work Problems 3...Ch. 10 - Prob. 5IAPACh. 10 - Prob. 6IAPACh. 10 - Prob. 7IAPACh. 10 - Prob. 8IAPACh. 10 - Prob. 9IAPACh. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 6MCQ
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