The major drawback of a binding price ceiling is:
a. it causes a surplus
b. government regulations of this kind are difficult to enforce
c. it causes a shortage.
d. none of the above; there is no drawback.
c
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Now suppose that the firm is contemplating the use of a new abatement (AN) technology, which would generate the following cost functions: TACN = 1000 + 0.125(AN)2 MACN = 0.25(AN) Find the cost savings to the firm of using this new technology when faced with the emission charge.
Consider the following abatement cost functions (TACO andMACO) for a firm using an old abatement (AO) technology: TACO = 1000 + 0.25(AO)2 MACO = 0.5(AO), where A isunits of abatement undertaken by the firm, and the cost values are in thousands of dollars. Further assume that the regulatory authority has set an abatement standard (AST) equal to 40 units for each firm and has proposed an emission charge implemented as a constant per unit tax (t) of $10 (i.e., MT = 10), where Total Tax = t(AST – Ai), and Ai is the existing abatement level.
A tax levied on an individual's total lifetime acquisitions from inheritances and gifts is known as
A. inheritance tax. B. death tax. C. accessions tax. D. unified transfer tax.
Suppose you had to design an economic system for a country that had never existed before, like one of the former Soviet Union countries. What criteria would you consider to minimize the excess burden of the system of taxation?
What will be an ideal response?
If an economy is experiencing deflation, a decrease in the price level, then the most advantageous actions would be
A. borrowing money at a fixed interest rate and buying a house. B. borrowing money at a fixed interest rate and buying land. C. keeping money in a checking account. D. keeping your wealth in gold and other precious metals.