A pollution tax
a. is itself a form of negative externality
b. is a positive externality used to offset a negative one
c. is a price per unit of discharge of pollution
d. is a tax on pollution control equipment
e. may cause a common pool problem
C
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The CEO and stockholders are not necessarily the same people. This gives rise to
A) upstream and downstream contracts. B) a principal-agent problem. C) complete contracts. D) a control over moral hazard.
A monopolist charges a price that is ________ and produces ________ than a perfect competitor
A) lower; less B) higher; less C) higher; more D) lower; more
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point A to Point D. This could be explained by
A. an increase in economic growth. B. a change in society's preferences for motorcycles versus hybrid cars. C. a reduction in unemployment. D. an improvement in technology.
Answer the following statements true (T) or false (F)
1. One basic argument for redistributing income to achieve more equality rests on the idea of maximizing the society's total utility when there is diminishing marginal utility from income. 2. The basic reason why the debate between income equality versus inequality is on-going is because there is a trade off between income equality and economic efficiency. 3. U.S. income statistics indicate that more than one-eighth of the nation lived in poverty in 2011. 4. The poverty rate in the U.S. increased significantly in the period 2007-2010. 5. The incidence of poverty is very high among the elderly (65 years or older).