If the Marginal Cost of an Activity Exceeds the Marginal

question 476

Multiple Choice

If the marginal cost of an activity exceeds the marginal benefit, then

• A) the activity will occur because the high marginal cost means it must be highly valued.
• B) the forgone alternatives' costs must be increased.
• C) an alternative action will be selected.
• D) the person must concentrate on the activity's total benefits.

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Definitions:

Tradable Emissions Permits

A system in which companies are allocated permits that allow them to emit a certain level of pollutants, with the option to buy, sell, or trade permits with other companies.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in the market, leading to market balance.

Equilibrium Quantity

Equilibrium quantity is the quantity of goods or services supplied and demanded at the equilibrium price, where the quantity supplied equals the quantity demanded in a market.

Emissions Tax

A tax levied on companies for the pollutants they emit into the environment.