In the presence of a negative externality
a. there is an overallocation of resources to production
b. the competitive equilibrium will not achieve an allocatively efficient solution
c. MSC exceeds MSB at the competitive output level
d. all of the above
e. (a) and (b) only
d. all of the above
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The figure above shows the U.S. demand and U.S. supply curves for cherries. At a world price of $2 per pound once international trade occurs, the production of cherries in the United States will equal
A) 200,000 pounds. B) 400,000 pounds. C) 600,000 pounds. D) 800,000 pounds. E) 0 pounds.
We find that the world price of sugar is 20 cents a pound, the U.S. does not trade internationally, and the U.S. equilibrium price of sugar is 30 cents a pound. If the U.S. begins to trade internationally, the price of sugar in the U.S
________ to the world price and U.S. consumers buy ________ sugar. A) falls; more B) falls; less C) rises; more D) rises; less E) falls; no
Two variables that have a negative correlation move in opposite directions
a. True b. False Indicate whether the statement is true or false
Income taxes are an automatic stabilizer because when income rises, ceteris paribus, tax receipts
A. Fall as taxpayers experience bracket creep. B. Rise because taxes are computed on the basis of income. C. Fall because income taxes are regressive. D. Fall because automatic stabilizers work against the cyclical movements of the GDP.