Figure 16.2Consider Figure 16.2, which depicts the supply and demand for coal. Assume coal production creates external costs. If the government imposes a pollution tax on coal production, the:
A. supply curve of coal would shift to the left.
B. supply curve of coal would shift to the right.
C. demand curve for coal would shift to the left.
D. demand and supply curves for coal would shift to the left.
Answer: A
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Answer the following statement(s) true (T) or false (F)
1. A market price contains no more information about a good than a good social planner would be able to obtain. 2. According to F.A. Hayek, knowledge is lost as statistics are used to convey information. 3. Whether a good is distributed by a social planner or a market system, the area beneath the demand curve out to the quantity available accurately measures the value consumers receive. 4. When allocation decision are not made on the basis of price traditional methods of social gain understate the actual gain to society.
Describe the scope of economic profit in the long run for a perfectly competitive firm
What will be an ideal response?
One consequence of unemployment is that:
A. some productive potential of the economy is being wasted. B. the time and skills of the unemployed are not being put to use. C. it can create uncertainty about the future. D. All of these are consequences of unemployment.
To answer, refer to the following: "Ford built 18 vehicles per auto employee in North America last year, while GM could only manage 12." (The Wall Street Journal) In comparison with GM, Ford had a higher
A. average product of labor. B. average product of capital. C. marginal product of capital. D. marginal product of labor.