Pollution taxes are intended to
A. reduce the budget deficit.
B. incentivize firms to cut their pollution.
C. reduce welfare of polluting firms.
D. raise deadweight loss.
Answer: B
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If the market in the figure above is a monopoly that maximizes its profit and charges every consumer the same price for each unit of output the consumer buys, the consumer surplus is equal to ________.
A) area A.
B) area B.
C) area C.
D) area D.
The 2011 U.S. distribution of income shows that the top 20 percent of all families have
a. more than twelve times the income of the bottom 20 percent. b. more than six times the income of the bottom 20 percent. c. more than 100 percent more income than the bottom 20 percent. d. the same share of income as the bottom 20 percent.
The assumptions needed for the Coase theorem to work:
A. are often observed in the real world. B. always hold true in the real world. C. often do not hold true in the real world. D. never hold true in the real world.
In the circular flow model, firms sell the services of factors of production to households.
Answer the following statement true (T) or false (F)