A Tannery Discovers a Technology That Makes It Cheaper to Reduce

question 126

Multiple Choice

A tannery discovers a technology that makes it cheaper to reduce the air pollution it generates in making paper.On a graph of the optimal level of air quality, the use of the new technology would be represented by

• A)a leftward shift of the marginal social cost curve
• B)a rightward shift of the marginal social cost curve
• C)movement to the right along the marginal social cost curve
• D)movement to the left along the marginal social cost curve
• E)a downward shift of the marginal net benefit curve

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Definitions:

Zero-Coupon Bond

A Zero-Coupon Bond is a debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value.

Yield To Maturity

The total return anticipated on a bond if it is held until the end of its lifetime.

Face Value

The nominal value printed on a financial instrument such as a bond or stock certificate; it is the amount paid at maturity or when the instrument is issued.

Current Price

The latest market price at which an asset or service is traded.