If the government's provision of a subsidy is too large to counteract the entire effect of a positive externality, the:
A. quantity consumed will become even lower.
B. quantity consumed will become too high.
C. total surplus will be maximized.
D. None of these statements is true.
B. quantity consumed will become too high.
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Printing money to meet government budget deficits:
A) helps combat inflation. B) increases real income. C) increases the demand for money. D) acts as a tax on the citizens in an economy.
A tax on sellers:
A. causes equilibrium price to increase and equilibrium quantity to decrease. B. cause equilibrium price and quantity to increase. C. cause equilibrium price and quantity to decrease. D. cause equilibrium price to decrease and equilibrium quantity to increase.
When economists make normative statements, they are
a. speaking as scientists. b. speaking as policy advisers. c. making claims about how the world is. d. revealing that they are very liberal in their views of how the world works.
Exhibit 12-1 Income distribution for three countries QuintileCountry I (%) Country II (%) Country III (%) Poorest 6 8 4 Second12 12 8 Third15 15 10 Fourth27 30 30 Richest40 35 48 Exhibit 12-1 shows the percentage of income received by each population quintile. In Country I we can conclude that the:
A. richest 20 percent of the population received 25 percent of the economy's income. B. richest 20 percent of the population received 40 percent of the economy's income. C. richest 20 percent of the population received 80 percent of the economy's income. D. least-wealthy 20 percent of the population received 40 percent of the economy's income.