Which of the following statements about pollution or pollution control is TRUE?
A) A nationwide uniform tax on emissions is the appropriate way to reduce pollution levels.
B) A tax to reduce pollution levels should be based on the economic damages rather than on the absolute amount of pollution.
C) Private costs of pollution usually exceed social costs.
D) The optimum amount of pollution abatement is where the total benefits of pollution abatement equal the total costs of pollution abatement.
Answer: B
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Figure 6-5
If the demand curve in Figure 6-5 is unit elastic, then total expenditure at A is ____ total expenditure at B.
A. greater than B. less than C. equal to D. less elastic than
Monetarists' preference for reduced-form models is based on their belief that
A) reverse causation is a problem. B) structural models may understate money's effect on economic activity. C) money supply changes are always endogenous. D) monetary policy affects only investment spending.
Jack and Diane each buy pizza and paperback novels. Pizza costs $3 per slice, and paperback novels cost $5 each. Jack has a budget of $30, and Diane has a budget of $15 to spend on pizza and paperback novels. Which consumer(s) can afford to purchase 5 slices of pizza and 3 paperback novels?
a. Jack only b. Diane only c. both Jack and Diane d. neither Jack nor Diane
A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.