Households in richmond to its residents and pay this

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households in Richmond) to its residents and pay this amount as compensation to the city of  Delta.       The $ 30 per household fee provides Richmond residents right incentives to  cut back their trashes to the efficient level.  With a fixed fee (that is independent of amount of trash), residents will have  no incentives to cut back their trashes.           The efficient level of pollution will be achieved only when Richmond  residents dump zero trash.    No.  Zero trash is not generally efficient because at zero, the marginal cost of  abatement may be extremely high.       Both before and after the imposition of this fixed fee, each Richmond  household’s net marginal private benefits from trash disposal is zero.    The fixed fee doesn’t change Richmond residents’ incentives and so they will  continue to produce trash to the level where (net) MPB = 0.       If the mayors of Delta and Richmond can bargain without transaction costs, and  control the behaviour of their citizens, then such bargaining can result in an  efficient  outcome only if Delta, the victim, has the right to a clean  environment.  The outcome will be efficient regardless of who has the property right. 3. A cereal company offers a new breakfast cereal, Nutty Oats Crunch, whose two inputs, not  surprisingly, are nuts and oats.  The production of each packet of this cereal requires exactly  1 lb of nuts and 2 lb of oats.   True     False       The isocost lines  of this company are L shaped.    The isoquants  (not isocost lines) are L shaped.       This cereal company’s production technology exhibits increasing returns to  scale.  4
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The production technology exhibits CRS in the sense that when both the inputs are  increased by t (>1) multiple, production also increases by the same t multiple.       The company has a Fixed-Proportion Production Technology.        The marginal rate of technical substitution of oats for nuts (MRTS) =  1/2.    The two inputs are complements and so they are not substitutable.  4. Dogonomics is a monopolist manufacturer of Dog collars, and faces linear demand.  It has  two plants with total plant costs given by C 1 (Q)=5+2Q 2   and C 2 (Q)=5+3Q 2   True     False         If Dogonomics produces, it will sell collars at a point where   demand is elastic.  T          Dogonomics will produce all of its output in factory 1.  F        An increase in fixed costs to one of the plants will never have an 
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  • Spring '09
  • Brian
  • Marginal product, The Profit, perfect price discrimination, Ratna Shrestha Ratna Shrestha Stephen Meyer Ralph Winter Ratna Shrestha Timothy Beatty, two­part tariff

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