A tax that creates an excess burden may nevertheless improve efficiency if
A. consumption of the good has been generating beneficial externalities.
B. consumption of the good has been generating no externalities.
C. consumption of the good has been generating detrimental externalities.
D. the good has been supplied by a monopolist.
Answer: C
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________ account(s) for between 1 and 4 percent of health care costs in the United States
A) The aging population B) The payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance C) Uninsured patients receiving treatments at hospital emergency rooms that could have been provided less expensively at doctor's offices D) Advances in medical technology
When the Fed changes money supply by selling government securities, the interest rate will
A) fall unless the LM curve is horizontal. B) fall unless the IS curve is vertical. C) rise if the LM curve is vertical or upward sloping. D) remain constant if the LM curve is vertical.
Because the price effect is smaller when there are _________ firms, each firm will increase its quantity by __________ before the price effect and quantity effect are equal.
A. more; more B. less; more C. similar; less D. more; less
If we think of good governance as a public good created by well-informed voters, we can predict that it will be:
A. oversupplied. B. undersupplied. C. in market equilibrium, if left unchecked. D. in market equilibrium, despite market interference.