Which of the following is a plausible solution to a distortion?
A. Imposing a tax or subsidy on the activity if the social marginal cost or the social marginal benefit exceeds the market price
B. Shutting down any industry which is contributing to atmospheric pollution
C. Imposing an importation ban on manufactured goods
D. Centralizing the privately owned enterprises
Answer: A
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Use the following graph to answer the next question.
All else held constant, higher inflation in the United States relative to that in Canada will cause a(n) ________.
A. decrease in the supply of U.S. dollars B. decrease in the value of the U.S. dollar in terms of the Canadian dollar C. increase in the value of the U.S. dollar in terms of the Canadian dollar D. increase in the demand for U.S. dollars
The case of production with a single variable input is analogous to
A. changing the use of land, labor, and capital in production by a constant absolute amount. B. a controlled laboratory experiment in which the scientist permits one variable to change at a time. C. changing the use of land, labor, and capital in production by a constant percentage. D. specialization in one particular product by a company.
When consumers act as price-takers, we say that they behave
A) cooperatively. B) competitively. C) monopsonistically. D) irrationally.
All of the following are true regarding the Lanham Act except which one?
A) Civil suits can be filed under the Lanham Act. B) It prohibits trademark infringement. C) It was passed in 1946. D) It does not allow a competitor to sue for marketplace damages.