To totally internalize an externality, a government can levy a tax related only to the physical quantity of pollution if
A) the economic damages associated with the pollution are different across different locations.
B) the economic damages are too large to be determined.
C) the economic damages associated with the pollution are the same across different locations.
D) the economic damages are zero.
Answer: C
You might also like to view...
The table below shows the data (in millions) for Wells Fargo Bank in September 2007 and September 2008. Suppose that the required reserve ratio is 3 percent
2007 2008 Loans 79 100 Reserves 11 11 Deposits 247 266 The data show that A) the currency drain ratio increased. B) the Federal Reserve must have increased the required reserve ratio. C) Wells Fargo had excess reserves and could create money in 2007. D) Wells Fargo was only able to make more loans in 2008 because it gained more deposits.
_____ is the reward savers earn for deferring consumption
a. Dividend b. Wage c. Rent d. Profit e. Interest
Rent controls tend to cause persistent imbalances in the market for housing because
a. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. b. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. c. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. d. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.
Suppose the marginal propensity to consume is 0.8. According to the model in the text, how much would equilibrium output go up if the government increased spending by $500 million (assuming all other factors are held constant)?
a) $400 million b) $625 million c) $900 million d) $2,500 million e) $4,000 million