The optimal level of pollution is achieved when:
a. the marginal social benefit from decreased pollution is equal to the marginal social cost of reducing pollution.
b. the level of pollution reaches zero.
c. pollution abatement exceeds the pollution level.
d. benefits from further pollution abatement are zero.
Question 2The export supply and import demand curves measure the domestic shortage and surplus, respectively, at different world prices.
a. True
b. False
Indicate whether the statement is true or false
Question 3Iceland can produce 32 units of food per person per year or 8 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true?
a. Iceland has both a comparative and absolute advantage in producing food.
b. Iceland has a comparative advantage, but not an absolute advantage in producing food.
c. Lavaland has both a comparative and absolute advantage in producing clothing.
d. Lavaland has both a comparative and absolute advantage in producing food.
Question 4The main duty of the Environmental Protection Agency (EPA) is to:
a. assure safe work places.
b. prevent crime.
c. enforce environmental standards.
d. regulate air transport.
e. regulate rates charged by generators of nuclear energy.
Question 5The higher the world price above the domestic no-trade equilibrium, the lesser the quantity of a good exported by a country.
a. True
b. False
Indicate whether the statement is true or false
Question 6A U.S. import tariff imposed on steel is likely to:
a. increase employment in the U.S. steel industry.
b. increase the real incomes of steel users.
c. raise the total quantity of foreign and domestic steel sold in the United States.
d. increase employment in the economy as a whole.
Question 7Identify the approach used by the Environmental Protection Agency (EPA) to enforce environmental standards.
a. pollution taxes
b. least-cost method
c. compliance standards
d. pollution rights
Question 8If the world price of a good is equal to its no-trade equilibrium price, the country will import more of the good from other nations.
a. True
b. False
Indicate whether the statement is true or false
Question 9Imposing a quota on metal softball bats shipped into the United States would likely:
a. increase the price of the bats but decrease the quantity of domestically made bats purchased in the United States.
b. increase the price of the bats and the quantity of domestically made bats purchased in the United States.
c. leave the price of the bats unchanged but decrease the quantity purchased in the United States.
d. leave both the price of bats and the quantity purchased in the United States unchanged.
Question 10Pollution reduction policies are likely to lead to:
a. higher product prices.
b. lower product prices.
c. unchanged product prices.
d. indeterminate changes in product prices.
Question 11Though the countries can benefit by completely specializing in the production of the good in which they have comparative advantage, in real world however, they do not completely specialize.
a. True
b. False
Indicate whether the statement is true or false
Question 12Imposing a quota on metal softball bats shipped into the United States would likely:
a. increase the price of the bats but decrease the total quantity of bats purchased in the United States.
b. increase the price of the bats and the total quantity of bats purchased in the United States.
c. leave the price of the bats unchanged but decrease the quantity purchased in the United States.
d. leave both the price of bats and the quantity purchased in the United States unchanged.
Question 13Which of the following allows the greatest value to be generated with a given amount of pollution?
a. Pollution tax
b. Regulatory guidelines
c. Compliance standards
d. Pollution rights
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