One way to make consumers take a positive externality into account in their demand decision is to:
A. place a tax on the item.
B. tax the producers of the item.
C. subsidize the purchase of the item.
D. None of these statements is true.
Answer: C
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Non-activists believe that postwar instability is primarily the result of
A) erratic growth of private investment. B) uneven changes in real government expenditures. C) uneven changes in private consumption of durables. D) A and C are both correct.
The largest source of income for most people is:
A. income from interest in savings accounts. B. wages earned at work. C. rental income from properties that they own. D. investment income.
An article in a recent economics periodical asks the question: "Is low inflation worth it?" By "it," the article probably means
a. the loss of comparative advantage. b. enduring externalities. c. unemployment. d. repealing the law of supply and demand. e. the opportunity cost of higher interest rates.
The more elastic the supply of a product, the more likely it is that the burden of a tax will
a. fall on sellers. b. fall on buyers. c. fall equally on both buyers and sellers. d. be borne by the public sector, and not by market participants.