Q1. It has been proposed that a government agency be charged with the responsibility for determining the amount of pollution which the atmosphere or a body of water can safely recycle also sells these limited rights to polluters. From an economist's perspective, illustrate what would be the advantage of such a marketplace for pollution rights?
Q2. Q1. T-Shirt Enterprises is selling in a purely competitive marketplace. Its output is 300 units, which sell for $1 every. At this level of output, marginal cost is $1 also average variable cost is $1.50. The firm should:
Increase output to 350 units
Produce zero units of output
Decrease output to 250 units
Continue to produce 300 units