Suppose a firm wants to build a new factory that would add pollution to an already polluted area. Under an offset program, the firm must:
A. install scrubbers and other government-mandated equipment.
B. purchase pollution permits from the government.
C. reduce or eliminate an old pollution source in the area.
D. pay a tax which depends on the amount of pollution created.
Answer: C
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As more people started building houses in your community, more street lights were installed in your locality making it safer and easier to drive through. This is an example of a(n) ________
A) pecuniary externality B) network externality C) moral hazard D) adverse selection
Monoploy
What will be an ideal response?
Refer to the graph shown. Monetary policy that shifts the AD curve from AD0 to AD2 is
A. contractionary. B. neither expansionary nor contractionary since it does not affect output. C. expansionary. D. neither expansionary nor contractionary since it does not affect inflation.
The difficulties in managing government in a market economy include the following, except:
A. The need for complex bureaucracy of various levels B. The need for detailed paperwork and inflexibility C. The close resemblance of government to the "invisible hand" D. The lack of accountability in government