Author Question: A large farming operation which uses a potent fertilizer is located up river from a trout farmer. If ... (Read 85 times)

corkyiscool3328 · **on:** Jun 29, 2018

A large farming operation which uses a potent fertilizer is located up river from a trout farmer. If property rights of the river exist and transactions costs are low, the amount of pollution will be ________.

A) efficient only if the trout farmer owns the river
B) inefficient if the farming operation owns the river
C) efficient if either the farming operation or the trout farmer own the river
D) always inefficient

Question 2

The budget line can shift or rotate

A) only when income changes.
B) only when prices change.
C) when either income or prices change.
D) None of the above, because changes in income and prices do not shift or rotate the budget line.