Assignment Instructions/ Description
Representatives Waxman of California and Markey of Massachusetts proposed a law to limit greenhouse gas emissions from electricity generation and require electricity producers to generate a minimum percentage of power using renewable fuels, with some rights to emit to be auctioned. The Congressional Budget Office estimated that the government would receive $846 billion from auctions and would spend $821 billion on incentive programs and compensation for higher energy prices. Electricity producers would spend $208 million a year to comply with the new rules. (Think of these dollar amounts as dollars' worth of other goods and services.)Will the Waxman-Markey law achieve production efficiency?A.Unlikely, because mandating which specific technology to use prevents producers from choosing the most efficient technology. Your answer is correct.B.No, because any reduction in emissions puts the economy inside the PPF.C.No, because Congress always wastes resources.D.Yes, because we must cut greenhouse gas emissions at any cost.E.Yes, because wind power is free.
The table shows the production possibilities of a small Pacific island economy.If the citizens of this economy produce 4 pounds of fish and 5 pounds of berries, they will enjoy a free lunch because they _______. A.can produce more berries with no tradeoffYour answer is correct.B.don't have to give up any work time to eatC.are producing fish and berries efficientlyD.are producing on the economy's PPFThe production possibilities frontier is the boundary between the combinations of goods and services that _____, given the available factors of production and the state of technology.A.can be produced and the prices paid for thoseB.can be produced and the combinations that cannot be producedYour answer is correct.C.we want to produce and what we want to consumeD.we want to produce but cannot consume
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