Question

1. According to economic theory, the efficient amount of pollution in the economy is the point at which: a. b. c. All your enemies have been vanquished by the amount of pollution you have produced The marginal benefit of reducing pollution further is zero The total benefits of eliminating pollution are equal to the total costs of eliminating pollution The marginal benefits of reducing pollution further are equal to the marginal costs of reducing pollution further There is no pollution in the economy d. e. According to our discussions and data from the Wall Street Journal, people in the United States tend to have: 2. More babies during an economic recession than would normally be expected Roughly the same number of babies during economic recessions and p economic growth Fewer babies during an economic recession than would normally be expected Abnormally large heads a. b. c. d. 3. Which of the following best represents the idea of the marginal cost of increasing speed while driving? a. b. c. d. The total amount of time it will take to arrive at your destination The amount of time saved by increasing your speed The probability that you receive a ticket for speeding The increase in the probability that you receive a ticket as you increase speed Which of the following could be considered an indirect response to incentives provided by government programs offering wage subsidies to companies that hire more workers? 4. Companies often replace more expensive full-time workers with new part-time workers (whose wages are being subsidized) Companies often hire new workers because the subsidies reduce the cost of workers Companies often decide that they do not need to hire new workers All of the above a. b. c. d. 5. Which of the following would cause the demand curve to shift to the right in the Moscow market for Hot Pockets? A decrease in the price of Hot Pockets An increase in Moscow's population An increase in the wages of workers in the production facilities where Hot Pockets are produced A decrease in the price of the "meat" used to produce Hot Pockets Any of the above could shift the demand curve to the right a. b. c. d. e.

Answer 1

1..)

Right Answer: (D)

Efficient level of pollution in economy is reached where Marginal benefits of reducing pollution are equal to the marginal costs of reducing pollution further. After this point marginal benefits of reducing pollution becomes less than marginal cost of reducing pollution further.