When a Pigouvian subsidy is imposed on a market with a positive externality efficiency:
A. is not affected.
B. increases.
C. decreases.
D. drops to zero.
Answer: B
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A black market
A) is legal only when it is associated with government price ceilings. B) is defined as the deadweight loss associated with taxes. C) benefits no one. D) is a potential outcome of a price ceiling. E) is always legal.
Use the above table. The data shows that the firm
A) is hiring in a perfectly competitive labor market. B) is selling its output in a perfectly competitive market. C) is a monopsonist. D) is selling its output in an imperfectly competitive market.
The output level that occurs in any market that is in equilibrium:
a. is the quantity where the supply curve intersects the y-axis. b. is the quantity where the demand curve intersects the x-axis. c. is the quantity at an output level where buyers will pay more than suppliers require. d. is an output level where buyers will not pay as much as suppliers require. e. is the quantity where the demand and supply curves intersect each other.
A wheat farmer who must purchase his inputs now but will sell his wheat at a market price at a future date:
A. is a good example of what the chapter refers to as a speculator. B. would hedge by taking the short position in a wheat futures contract. C. would hedge by taking the long position in a wheat futures contract. D. faces a market risk that cannot be offset.