If government uses a pollution tax to control pollution, the tax should be set
A) equal to the private cost of production created by the activity.
B) equal to the external cost of production created by the activity.
C) equal to the social cost of production created by the activity.
D) at the amount that will eliminate the pollution completely.
B
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Specific tariffs are
A) import taxes stated in specific legal statutes. B) import taxes calculated as a fixed charge for each unit of imported goods. C) import taxes calculated as a fraction of the value of the imported goods. D) the same as import quotas. E) import taxes calculated based solely on the origin country.
Which of the following is not a way in which high inflation reduces productivity?
a. High rates of inflation increase menu costs. b. Rapid inflation destroys work incentives and encourages speculation. c. Variable rates of inflation create insecurity. d. High inflation rates also have the power to deteriorate international competitiveness. e. High rates of expected inflation increase the real interest rate and thus reduce investment.
For given input prices, isocosts closer to the origin are associated with:
A. lower costs. B. higher costs. C. initially lower, then higher costs. D. the same costs.
Exhibit 8-2 Demand and cost information for a monopoly Q P TC 0 40 10 1 30 15 2 20 25 3 10 40 4 0 60 The marginal revenue of the second unit of output in Exhibit 8-2 is:
A. 10. B. 20. C. 30. D. 40.