If a Pigovian tax is too large, the resulting:
A. outcome will not maximize surplus.
B. quantity will be too high.
C. outcome will still be efficient.
D. All of these statements are true.
Answer: A
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Those who favor active policy making argue that all of the following exist EXCEPT
A) perfectly flexible wages and prices. B) inflation and unemployment are stable in the short run and predictable in the long run. C) pure competition is not typical. D) aggregate demand shocks can influence real GDP and unemployment.
If Japan could produce more steel in a year than the United States using the same amount of resources, then
a. Japan must have an absolute advantage in producing steel b. the United States must have a comparative advantage in producing steel c. Japan must have a comparative advantage in producing steel d. neither the United States nor Japan will have a comparative advantage in producing steel e. there would be no gains from specialization
Corporate management can defend itself against the threat of a hostile takeover in all of the following ways except
a. use of shark repellent activities b. buying its own corporate stock c. acquiring considerably more debt d. finding a white knight e. keeping a large cash reserve for an emergency
In this graph for the marginal costs and benefits of pollution controls, the amount spent for pollution control greatly outweighs the benefits at ______.
a. Q1
b. Q2
c. Q*
d. both Q1 and Q2