As the relative price paid to a resource in a particular use rises,
a. resources will be drawn from lower-valued uses to higher-valued uses
b. resources will be drawn from higher-valued uses to lower-valued uses
c. resources will generally remain where they are currently employed
d. the supply of that resource will shift to the right
e. the supply of that resource will shift to the left
Question 2
The optimal level of pollution is
a. zero
b. the level at which the marginal social cost of air quality equals the marginal social benefit
c. the level at which the average social cost of air quality equals the average social benefit
d. the level at which the total social cost of air quality equals the total social benefit
e. the level at which the marginal social cost of air quality is minimized
Relative Positional Terms
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