An efficient way to get a tire manufacturer to produce the socially optimal output level is
A) to impose a tax to make the tire manufacturer bear the external cost it creates.
B) for government to set a quota on the quantity of tires that it can produce.
C) to grant a subsidy to enable the manufacturer to internalize the external costs of production.
D) to assign property rights to the tire manufacturer.
A
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In a perfectly competitive market, which of the following will increase the economic profit the firms make in the short run?
A) a decrease in market demand B) an increase in market demand C) an increase in labor costs D) an increase in the number of firms
If the CPI in City A is 150 and the CPI in City B is 135,
a. the dollar has greater purchasing power in City B. b. prices are higher in City A than they are in City B. c. City B must be using a different base year. d. None of these.
A customs union is an organization of nations whose members:
a. have impenetrable trade barriers among themselves but impose no trade barriers on nonmembers. b. have no trade barriers among themselves but impose common trade barriers on nonmembers. c. have no trade barriers among themselves but each member country chooses its own trade policies toward nonmember countries. d. retaliate each other by raising reciprocal tariffs. e. neither have trade barriers among themselves nor impose any restriction on the nonmember countries.
The government can close an inflationary gap by reducing government spending
Indicate whether the statement is true or false