The relative concept of poverty is based on how far behind average income a particular family gets.
Answer the following statement true (T) or false (F)
True
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When does a private solution to a negative externality fail to allocate resources efficiently?
What will be an ideal response?
Continue with the power plant from the previous question, where again coal currently sells for $60 a ton but will sell for either $54 or $66 next month with equal probability. Now suppose coal can be stored for a month at the cost of $2 per ton. How would the new alternative of being able to buy coal at today's prices and store it affect the amount the power plant would be willing to pay for an
option to buy coal next month at today's prices? a. Increase its willingness to pay for the option. b. Decrease its willingness to pay for the option. c. Lead it to never pay for the option. d. No effect. The new alternative of storing would never be chosen since it is worse than simply waiting and buying at next month's uncertain price.
Market demand curves are found by
a. vertically summing individual demand curves. b. horizontally summing individual demand curves. c. summing individual demand curves in a parallel fashion. d. adding the slopes of individual demand curves.
Income tax revenues rise as income tax rates fall. It follows that the
A) percentage cut in the tax rate is greater than the percentage increase in the tax base. B) percentage cut in the tax rate is less than the percentage increase in the tax base. C) percentage cut in the tax rate is equal to the percentage increase in the tax base. D) marginal tax rate is equal to the average tax rate E) b and d