Burning coal to generate electricity can create pollution. If the market for generating electricity is competitive and is allowed to operate without any government intervention, is the equilibrium quantity of coal burned equal to, more than, or less
than the efficient quantity?
The equilibrium quantity of coal burned is more than the efficient quantity. In a market for a good with an external cost, an unregulated competitive market will have an equilibrium quantity that exceeds the efficient quantity.
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The income elasticity of demand for agricultural products is typically
a. less than zero. b. greater than zero, but less than one. c. greater than one. d. infinity.
Half of American recessions since the early 1950s have been caused at least in part by rapid increases in oil prices
a. True b. False
Which of the following is not true of tax loopholes?
A. They reduce the progressivity of the federal income tax. B. They encourage particular patterns of behavior. C. They include exemption of interest earned on municipal bonds. D. They reduce excess burdens.
Price ceilings create shortages, but taxes do not.
Answer the following statement true (T) or false (F)