Jose is rational if he
A) does not intentionally make decisions that would leave him worse off.
B) never makes a mistake in his life.
C) only responds to rewards that involve money.
D) always uses a model or mathematical formula to help him make a decision.
Question 2
According to the above figure, if steel mills are charged an effluent fee in order to bear the cost of pollution, what happens to the equilibrium price and equilibrium quantity?
A) They are unchanged.
B) They change from P1 and Q1 to P2 and Q2.
C) They change from P2 and Q2 to P1 and Q1.
D) The equilibrium price increases from P1 and P2, but the equilibrium quantity is unchanged.
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