The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient level of output
A) is achieved.
B) can be achieved by giving paper producers a subsidy.
C) can be achieved by imposing a Pigovian tax on paper producers.
D) cannot be achieved.
C
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In the early 1970s, in an attempt to solve the problem of the overvalued U.S. dollar, world leaders
a. increased the price of gold in terms of other currencies b. appreciated the dollar, which made foreign exchange cheaper to U.S. residents c. appreciated the dollar, which made foreign exchange more expensive to U.S. residents d. devalued the dollar, which made foreign exchange cheaper to U.S. residents e. devalued the dollar, which made foreign exchange more expensive to U.S. residents
Suppose three firms form a cartel and agree to charge a specific price for their output. Each individual firm has an incentive to maintain the agreement because the firm's individual profits will be the greatest under the cartel arrangement
a. True b. False Indicate whether the statement is true or false
In the loanable funds model, an increase in an investment tax credit would create a
a. shortage at the former equilibrium interest rate. This shortage would lead to a rise in the interest rate. b. shortage at the former equilibrium interest rate. This shortage would lead to a fall in the interest rate. c. surplus at the former equilibrium interest rate. This surplus would lead to a rise in the interest rate. d. surplus at the former equilibrium interest rate. This surplus would lead to a fall in the interest rate.
Which of the following is a condition that most people would NOT expect the safety net of the government to provide for?
a) injuries b) joblessness c) natural disasters d) low income