Economics For Today
Economics For Today
9th Edition
ISBN: 9781305507074
Author: Tucker, Irvin B.
Publisher: Cengage Learning,
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Chapter 4, Problem 14SQ
To determine

Describe positive externalities.

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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
The prairie dog has always been considered a problem for American cattle ranchers. They dig holes that cattle and horses can step in and they eat grass necessary for cattle. Recently, ranchers have discovered that there is a demand for prairie dogs as pets. In some areas prairie dogs can sell for as high as $150. Cattlemen are now fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle. Draw a production possibilities frontier showing a rancher's production option between cattle production and prairie dog production showing increasing opportunity cost and show what would happen in each of the following situations. (Use a separate graph for each situation.)
Instructions There is often a temptation to take a dim view of profits. Some people seem to believe profits come at the expense of buyers. It is easy to reason that if profits were lower, prices could be lower thus benefiting consumers.  a.      What are economic profits? Explain in detail. b.      Do economic profits harm the interests of consumers? Explain in detail. c.      Can there be a socially useful outcome when economic profits exist? Explain in detail. d.      Do lower prices always benefit consumers? Explain in detail.
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