The equimarginal principle therefore says the following: If you have multiple sources to produce a given product or achieve a given goal, and you want to page 56minimize the total cost of producing a given quantity of that output, distribute production in such a way as to equalize the marginal costs between the production sources.

one of the criteria we will want to use to evaluate environmental policies is whether the policies create incentives for individuals, firms, and industries to engage in vigorous R&D programs.

This marginal cost curve depicts an important generic characteristic of all marginal cost curves, namely, that although they may initially decline, they will always increase, eventually, as output becomes large enough.

opportunity costs are measured by the market value of inputs used up in production.

The more of something that is desired, the more resources we will have to devote to its production.

The main step in doing this is to find out as clearly as possible how the various environmental policies and programs, present or proposed, affect people at different income levels.

The word benefits clearly implies being made better off.

A straight-line demand relationship would imply a uniform change in the quantity demanded as its price changes. For most goods, however, this is unlikely to be true. At low prices and high rates of consumption, studies have shown that relatively small increases in price will lead to substantial reductions in quantity demanded.

The value of this good to a person is what the person is willing and able to sacrifice for it.