If Both the Marginal Cost and the Average Variable Cost

question 29

Multiple Choice

If both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the average variable cost curve, the marginal cost must be:

• A) greater than the average variable cost.
• B) less than the average variable cost.
• C) equal to the average variable cost.
• D) at its minimum.

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Definitions:

Sustainability Damage

Negative impacts to the environment, society, or economy due to unsustainable practices or decisions.

Carbon Tax

A fee imposed on the burning of carbon-based fuels (coal, oil, gas) aimed at reducing the emission of greenhouse gases into the atmosphere.

Cap and Trade

An environmental policy tool that sets a limit (cap) on emissions and allows companies to trade (buy or sell) allowances that permit them to emit a certain amount of pollutants.

Tragedy of the Commons

A situation where individual users, acting independently according to their own self-interest, deplete or spoil shared resources, to the detriment of all users.