If the government wishes to correct the existence of a negative externality, it could
A) grant subsidies to consumers to stimulate demand.
B) impose a tax on the producers to reduce supply.
C) impose taxes on consumers to stimulate demand.
D) grant subsidies to producers to reduce supply.
Answer: B
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Increases in human capital can come
A) only from formal schooling. B) from employing more machinery. C) only from on-the-job experience. D) from formal education and on-the-job learning. E) from nowhere because whatever human capital an individual possesses is what he or she was born with.
The strongest political pressure for a trade policy that results in higher protectionism comes from
A) domestic workers lobbying for import restrictions. B) domestic workers lobbying for export restrictions. C) domestic workers lobbying for free trade. D) domestic consumers lobbying for export restrictions. E) domestic consumers lobbying for import restrictions.
Which statement is true regarding average variable cost?
a. Average variable cost is the additional cost of producing one more unit of output. b. The average variable cost curve will always lie below the curve for average total cost. c. Average variable cost is obtained when variable cost is multiplied by quantity of output. d. As output grows, average variable cost moves farther away from average cost.
Demand-pull inflation may be caused by:
a) An increase in costs b) A reduction in interest rates c) A reduction in government spending d) An outward shift in aggregate supply