To maximize welfare in a competitive market that has a negative externality in production, government should tax a pollution-generating good at a specific tax equal to the marginal cost of producing the good
Indicate whether the statement is true or false
False. The tax should equal the marginal harm of the pollution at the socially optimal quantity of the good.
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If the Fed wants to maintain current interest rates, it would be buying government bonds in the open market when ________.
A. investment demand decreases B. the demand for money increases C. the demand for money decreases D. investment demand increases
If interest rates in Mexico decrease while the interest rates in the United States remain unchanged then
A) the supply of Mexican pesos will increase. B) the supply of Mexican pesos will decrease. C) the supply of U.S. dollars will increase. D) None of the above answers is correct.
Large barriers to entry exist in which of the following market structures?
A. Perfect competition only B. Perfect competition and monopolistic competition C. Oligopoly and monopoly D. Monopoly only
Which is the most accurate statement?
A. The federal minimum hour wage rate puts millions of Americans above the poverty line. B. Most black families live below the poverty line. C. In 2008 the poverty rate was higher than it was in 2006. D. Welfare Reform basically eliminated poverty as a major socioeconomic problem.