Arguments That Economic Growth Must Be Constrained by Environmental Problems

question 5

Multiple Choice

Arguments that economic growth must be constrained by environmental problems and limits of natural resources ignore the fact that economic growth can:

• A)be measured in both nominal and real terms.
• B)increase both average labor productivity and the share of population employed.
• C)take the form of improved quality as well as increased quantity.
• D)occur with only benefits and no economic costs.

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Definitions:

Shutdown Quantity

The amount of output at which a company's revenue just covers its variable costs, prompting it to cease operations temporarily if prices fall below this level.

Monopolistically Competitive

This refers to a market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and product differentiation.

Economic Profit

The difference between a firm's total revenues and its opportunity costs, representing the additional gain over what could have been earned in the next best alternative.

Normal Profit

The minimum level of earnings needed for a company to remain in business, often considered as the company's opportunity cost.