For Each Additional Lamp Produced,a Constant Opportunity Cost Is Incurred

question 68

Multiple Choice

For each additional lamp produced,a constant opportunity cost is incurred in terms of bookshelves.This means that

• A) it takes more resources to produce a lamp than a bookshelf.
• B) it takes fewer resources to produce a lamp than a bookshelf.
• C) for every lamp produced,a constant number of bookshelves is forfeited.
• D) for every lamp produced,a different number of bookshelves is forfeited.

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Definitions:

Free Market

An economic system where prices for goods and services are determined by the open market and consumers, with minimal government intervention.

Optimal Pigouvian Tax

A type of tax designed to correct the negative externalities of a market activity, set at a level that equates the marginal social cost of the externality with the marginal private cost.

Socially Optimal

A condition where resources are allocated in a way that benefits society as a whole, maximizing overall welfare.

Pollution

The introduction of contaminants into the natural environment that cause adverse change, affecting air, water, and land.