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2 2002 AP® MICROECONOMICS FREE-RESPONSE QUESTIONS (Form B)
2. The government has decided to take action to reduce the pollution caused by the chemical industry. This industry
is composed of profit-maximizing, perfectly competitive firms.
(a) Identify one policy that the government could implement to reduce pollution.
(b) Explain the effect the policy you identified in part (a) would have on each of the following for the firms in
the chemical industry.
(i) Marginal cost
(c) Explain the effect of the policy you identified in part (a) on the efficiency of the alloca...
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This note was uploaded on 02/03/2014 for the course ECONOMIC 112 taught by Professor Van le during the Winter '12 term at American Internation College.
- Winter '12
- van le