For a Privately Owned Business in a Competitive Market Setting

question 111

Multiple Choice

For a privately owned business in a competitive market setting,

• A) reducing resource use while producing the same output adds to profit and typically reduces waste products and thus cuts pollution as well.
• B) when property rights are well-defined and strictly enforced, the firm will be able to pollute air and water without having to bear the cost of the damages imposed on others.
• C) wasteful use of resources results in more pollution but greater profit.
• D) reducing pollution almost never pays.

---

Definitions:

Real Interest Rate

The interest rate, once revised for inflation, to represent the actual borrowing cost or the real savings yield.

Inflation Rate

The measure of how rapidly the general price point of goods and services escalates, which in turn diminishes the power to buy.

Consumer Price Index

A metric that calculates the mean fluctuation over time in the amounts urban consumers spend on a specified collection of consumer goods and services.

Purchasing Power

How much goods or services can be bought with one unit of money, indicating the currency's value.