Refer to Table 2-14. What is Ireland's opportunity cost of ...

[rachel9]

Refer to Table 2-14. What is Ireland's opportunity cost of producing one guitar?
 
  A) 0.2 motorcycles B) 5 motorcycles C) 8 motorcycles D) 32 motorcycles

Question 2

Briefly explain the command-and-control approach in dealing with an externality such as pollution. Give an example of the U.S. government using the command-and-control approach to deal with the pollution problem.
 
  What will be an ideal response?

[recede]

Answer to Question 1

A

Answer to Question 2

Command-and-control is an approach that involves the government imposing quantitative limits on the amount of pollution firms are allowed to emit or requiring firms to install specific pollution control devices. One example listed in the text ocurred in 1983, when the federal government required auto manufacturers to install catalytic converters to reduce auto emissions on all new automobiles.