In the case of a positive externality, in order to achieve efficiency the government must set the _________________ equal to the marginal ____________________
A) tax; external costs
B) tax; external benefits
C) subsidy; external costs
D) subsidy; external benefits
E) subsidy; private costs
D
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Suppose a company that produces mouthwash branches out into producing toothpaste. If this expansion reduces the average cost per unit, the company must
a. benefit from vertical integration b. benefit from horizontal integration c. experience economies of scale d. experience economies of scope e. have no transaction costs
The value of the goods and services Australia purchases from the U.S. are less than the value of goods and services the U.S. purchases from Australia. The U.S. has
a. positive net exports with Australia and a trade surplus with Australia. b. positive net exports with Australia and a trade deficit with Australia. c. negative net exports with Australia and a trade surplus with Australia. d. negative net exports with Australia and a trade deficit with Australia.
Demand for an input is derived from the demand for the final product.
Answer the following statement true (T) or false (F)
Lower marginal tax rates in welfare programs will increase the incentive to work.
Answer the following statement true (T) or false (F)