Suppose the Environmental Protection Agency uses a corrective tax to set a price for pollution. Under this policy, is the supply curve for pollution rights vertical or is it horizontal?
The supply curve is horizontal.
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For a single-price monopolist to sell one more unit of a good, it must
A) lower the price on just the last unit sold. B) lower the price on all units sold. C) raise the price on just the last unit sold. D) raise the price on all units sold.
Two candidates are running for election as mayors of New York City that was recently impacted by Superstorm Sandy. In their election platforms, both candidates supported spending very similar amounts on hurricane protection
This similarity is most likely the result of A) both candidates necessarily having the same preferences towards risk and protection. B) the Principle of Minimum Differentiation. C) both the candidates realize that hurricane protection is a public good. D) politicians only take efficiency into account and hence all candidates will suggest the efficient outcome.
The opportunity cost of holding money is measured by:
A) short-term nominal interest rate B) short-term real interest rate C) long-term nominal interest rate D) long-term real interest rate
In the Mundell-Fleming model, regardless of whether the economy has perfect capital mobility or not, an increase in the money supply
a. reduces interest rates . b. increases income. c. decreases the trade balance. d. increases capital inflows.