Refer to Table 2-5. What is Finland's opportunity cost of ...

[saliriagwu]

Refer to Table 2-5. What is Finland's opportunity cost of producing one board foot of lumber?
 
  A) 0.25 cell phones B) 4 cell phones C) 12 cell phones D) 16 cell phones

Question 2

Would the Waxman-Markey law achieve production efficiency?
 
  What will be an ideal response?

[jennafosdick]

Answer to Question 1

A

Answer to Question 2

Production efficiency requires producing on the PPF. Use a PPF showing the tradeoff between electricity and clean air. Production efficiency requires producing on the PPF so that gaining more clean air means giving up some electricity. Before the new law, production might have been on the PPF if the producers had used the most efficient technologies and taken account of the pollution they created. After the law is in place, production might be within the PPF if the law requires more production of energy from renewable sources than is production efficient.

[saliriagwu]

TYSM

[frankwu0507]

Thanks for the timely response, appreciate it