As more pollution is abated, the marginal social benefit from further abatement diminishes.
a. True
b. False
QUESTION 2One determinant of the derived demand for a resource is the
a. price of the product made using the resource
b. extra cost of the resource
c. marginal resource cost of the resource
d. availability of the resource in the marketplace
e. quantity of the resource demanded
QUESTION 3The socially optimal amount of pollution abatement may be less than 100 percent.
a. True
b. False
QUESTION 4A firm's demand for a resource is a(n)
a. final demand
b. derived demand
c. secondary demand
d. induced demand
e. marginal demand
QUESTION 5If the marginal social cost of producing a product exceeds the marginal social benefit, producers will produce less of it.
a. True
b. False
QUESTION 6Which of the following best illustrates the concept of derived demand?
a. As income rises, the demand for TVs rises.
b. A fall in the price of cameras will increase the demand for film.
c. A fall in the demand for tires will reduce the demand for rubber.
d. When the price of gasoline rises, the demand for automobile repair falls.
e. If consumers expect the price of coffee to rise, demand for coffee rises.
QUESTION 7A removal or depletion tax on an open-access resource increases the marginal private cost of using the resource by
a. zero
b. the amount of the tax
c. the marginal product of the resource
d. the average private cost of using the resource
e. the average social cost of using the resource
QUESTION 8Which of the following is not an example of derived demand?
a. As more high school graduates go on to college, more professors are hired.
b. As consumers buy more computers, they demand more powerful computers as they become available.
c. As people let their hair grow longer, fewer people become barbers.
d. As people buy more tennis shoes instead of sandals, they buy more shoe laces.
e. Increased demand for overnight delivery speeds up orders for new delivery trucks.
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