If the number of ITQs issued equals the efficient production level, what is the price of an ITQ?
What will be an ideal response?
The price of an ITQ equals the marginal social benefit at the quota quantity minus the marginal private cost.
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Suppose the equilibrium price for pizza is $5 . If the government sets price at $4, the result would be
a. a shortage because at $4, the quantity demanded would exceed the quantity supplied b. a surplus because at $4, the quantity demanded would be less than the quantity supplied c. that the market would remain in equilibrium, but with a larger quantity bought and sold at $5 d. that at $4, the quantity sold would be greater than the quantity bought e. that at the equilibrium price of $5, fewer units would be sold
An economic contraction caused by a shift in aggregate demand causes prices to
a. rise in the short run, and rise even more in the long run. b. rise in the short run, and fall back to their original level in the long run. c. fall in the short run, and fall even more in the long run. d. fall in the short run, and rise back to their original level in the long run.
Figure 4-22
Refer to . From this tax the government will collect a total of
a.
$125.00.
b.
$175.00.
c.
$200.00.
d.
$250.00.
Suppose average attendance to Six Flags is 500,000 when prices are $40 a ticket and 450,000 when prices are $50 a ticket. Other things being equal, the data imply that the elasticity of demand for Six Flags is:
A. inelastic, so the increase in price caused total revenue to fall. B. inelastic, so the increase in price caused total revenue to rise. C. elastic, so the increase in price caused total revenue to fall. D. elastic, so the increase in price caused total revenue to rise.