If Production Is Characterized by Variable Technology, the Optimal Level

question 155

Multiple Choice

If production is characterized by variable technology, the optimal level of air quality occurs where

• A)the marginal private cost of air quality equals the marginal social benefit
• B)the marginal social cost of air quality equals the marginal social benefit
• C)the marginal social cost of air quality equals the marginal private cost of air quality
• D)government regulators set it
• E)all costs are absorbed by the polluter

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Definitions:

Sinking Fund Provisions

A requirement for a debtor to set aside funds at regular intervals to repay a bond or loan before its maturity in order to ensure the safety of the investment for creditors.

Bond Issue

The process by which a government or corporation raises funds by issuing bonds to investors, who lend them money in exchange for periodic interest payments and the return of principal at maturity.

Call Provision

A feature of a bond or other fixed-income security that allows the issuer to repurchase and retire the debt before its maturity date.

Par Value

The face value of a bond or stock as stated by the issuer, which is not necessarily indicative of its market value.