Figure 16.4The pollution tax in Figure 16.4:
A. reduces equilibrium output.
B. reduces pollution associated with the production of the good.
C. raises equilibrium price.
D. All of these
Answer: D
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__________ contributions to a defined __________ pension plan are tax-deferred until retirement
A) Employer; benefit B) Employer; contribution C) Employee; benefit D) Employee; contribution
Suppose an industry is composed of 10 firms. Each firm's share of total sales in the industry is 10 percent. If two of the firms merge, then the four-firm concentration ratio in the industry is
A) 40 percent. B) 45 percent. C) 50 percent. D) unable to determine.
Explain how the Social Security program affects economic output.
What will be an ideal response?
One reason some manufacturing companies have moved production from overseas locations back to the United States is rising foreign labor costs. Assuming that managers at these companies used all available information, including the rising cost of foreign
labor, when making the decision to move production back to the United States exemplifies which key economic idea? A) People are rational. B) People respond to economic incentives. C) Optimal decisions are made at the margin. D) The market system relies on the principle of voluntary exchange.