Externalities pose a market pricing system failure.
Answer the following statement true (T) or false (F)
True
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Per-unit pollution reduction subsidies
a. are implemented by paying a polluter for using a particular type of abatement equipment b. can elevate profits, which encourages entry, and hence can perversely increase aggregate emissions c. are used exclusively in the United States at the federal level of government d. are designed to lower the costs of abatement technology
"Gasoline purchases were up 10% last week, even though gasoline prices were 6 cents higher than the week before! You see, the law of demand does not hold for gasoline!" What is being misunderstood in the above statement?
A) Nothing at all. B) It implies the demand curve for gasoline is vertical. C) It fails to recognize that the demand curve has shifted to the right. D) It fails to hold constant all the other factors that influence demand.
Assume a consumer purchases two goods: X and Y. All else constant, an increase in the price of X would cause the total utility the consumer can obtain with her available income to decrease
Indicate whether the statement is true or false
The slope of the long-run aggregate supply curve is
A) positive. B) negative. C) zero. D) undefined.