Suppose the Production of DVDs Generates Sulfur Dioxide, an Air

question 153

Multiple Choice

Suppose the production of DVDs generates sulfur dioxide, an air pollutant.The equilibrium market quantity of DVDs produced and consumed:

• A)is less than the socially optimal quantity.
• B)is more than the socially optimal quantity.
• C)equals the socially optimal quantity.
• D)may be more than, less than, or equal to the socially optimal quantity.

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, leading to more efficient trade possibilities.

Labor-Intensive

Characterized by a high proportion of labor relative to capital in the production process.

Labor-Abundant

Describes economies or regions with a large workforce relative to the capital or land available.

Factor Endowments

Refers to the quantities of productive resources a country has available, including labor, land, and capital.