A Tradeoff Exists Between a Clean Environment and a Higher

question 109

Multiple Choice

A tradeoff exists between a clean environment and a higher level of income in that

• A)studies show that individuals with higher levels of income pollute less than low-income individuals.
• B)efforts to reduce pollution typically are not completely successful.
• C)laws that reduce pollution raise costs of production and reduce incomes.
• D)employing individuals to clean up pollution causes increases in employment and income.

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Definitions:

Fringe Firms

Smaller companies in a market that operate alongside the largest or mainstream businesses, often filling niches or offering alternative products.

Price Takers

Firms or individuals in a market who accept the prevailing prices and whose actions have no effect on said prices due to their small market share.

Kinked Demand

A demand curve that has a distinct bend or kink, typically resulting from an oligopolistic market structure where firms face different elasticities for price increases versus price decreases.

Oligopoly Model

A market structure characterized by a small number of large firms that dominate the market, leading to limited competition and potentially collusive behavior.