When an Environmentalist Insists That Clean Air Is Essential to Health

question 136

Multiple Choice

When an environmentalist insists that clean air is essential to health and that air pollution should be reduced to zero,this environmentalist has ignored

• A) the Coase theorem.
• B) the tragedy of the commons.
• C) pollution abatement.
• D) the cost-benefit principle.
• E) the law of demand.

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Definitions:

Contribution Margin

The amount by which a product's selling price exceeds its total variable costs, used to cover fixed costs and contribute to net profits.

Variable Expense Ratio

A financial metric that represents the proportion of variable expenses to sales revenue, indicating how much variable costs change in response to sales activity.

Break-even Point

The level of production or sales at which total costs equal total revenue, resulting in no net loss or gain.

Degree of Operating Leverage

A measure indicating how much sales revenue will translate into changes in operating income due to the proportion of fixed and variable costs.