A country called Sherwood is very heavily covered with a forest of
- Sketch a graph of a
production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. - Which choices display productive efficiency? How can you tell?
- Which choices show
allocative efficiency ? How can you tell? - In the choice between T and R, decide which one is better. Why?
- In the choice between T and S, can you say which one is better, and why?
- If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
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