Give an appropriate remedy for correcting excessive pollution and note any difficulties in implementing it
A tax on the polluting activity will help reduce output to the point where P = marginal social cost. Difficulties include the inability to measure the cost of the externality in monetary terms and the wide diffusion of the cost over many individuals.
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Which of the following are considered sources of bias in the CPI?
a. Prices changing too rapidly; substitution, new technologies; and quality changes. b. Prices changing too rapidly; substitution; quality changes; and growth in discounting. c. Quality changes; new technologies; prices changing too rapidly; and growth in discounting. d. Substitution; new technologies; prices changing too rapidly; and growth in discounting. e. Quality changes; new technologies; substitution; and growth in discounting.
Which of the following conclusions is not supported by the Three-Sector-Model?
a. An increase in a nation's supply of goods and services raises the amount sold per time period and lowers the nation's GDP Price Index. b. An increase in the demand for a nation's currency in the foreign exchange market raises its international value. c. An increase in a nation's real risk-free interest rate increases the willingness and ability of lenders/savers to supply credit to the real loanable funds market, and it decreases the willingness and ability of individuals and companies to borrow/invest. d. An increase in a nation's demand for goods and services within the Classical range usually leads to a strong decrease in the unemployment rate.
A perfectly competitive firm will hire workers up to the quantity at which the wage rate equals the
A. marginal revenue product of labor. B. price of the extra output produced. C. marginal factor cost of labor. D. average physical product of labor.
Bonds sold by the U.S. government that offer a certain real interest rate are known as
A) zero-coupon bonds. B) Treasury Inflation-Protected Securities. C) denominalized securities. D) savings bonds.