Incentive-based regulations:
a. set an environmental goal, but are flexible on how to achieve the goal.
b. obtain more efficiency gains is obtainable from CAC regulations.
c. effluent taxes are an example of incentive-based regulations.
d. all of the above are true.
e. none of the above are true.
d
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The solvency of Social Security can be extended if
A. the tax rate is reduced. B. the trust fund invests in government bonds. C. the retirement age is reduced. D. the cap on taxable earnings is raised.
If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars, then the price paid by buyers will
a. not change, and the price received by sellers will not change. b. not change, and the price received by sellers will decrease. c. decrease, and the price received by sellers will not change. d. decrease, and the price received by sellers will decrease.
Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing? The government could
a. regulate the monopoly. b. prohibited the monopoly from price discriminating. c. force the monopoly to operate at a point where its marginal revenue is equal to its marginal cost. d. None of the above would eliminate any inefficiency associated with a monopoly.
A policy reaction function describes how the action a policymaker takes depends on:
A. the political affiliation of the policymaker. B. the state of the economy. C. the reaction of special interest groups. D. public approval ratings.