A corrective tax:
a. internalizes an externality
b. legislates what is allowable.
c. increases the social costs of externalities.
d. increases the deadweight loss caused by an externality.
a
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If there is an increase in world taxes ________
A) domestic investment would fall B) net exports would increase C) the domestic interest rate would go down D) all of the above E) none of the above
In 2012, direct government purchases equaled ________ percent of expenditures of all levels of government
A) 71 B) 42 C) 26 D) 55
Assume that the production of a good imposes external costs upon third parties. If the price and quantity of this good is set by supply and demand the price will be too:
a. high and quantity too low for efficient resource allocation. b. low and quantity too low for efficient resource allocation. c. low and quantity too high for efficient resource allocation. d. high and quantity too high for efficient resource allocation.
The demand for labor of a perfectly competitive producer: a. is perfectly elastic at the going wage rate
b. is downward sloping because prices fall when the producer increases output. c. is downward sloping because of diminishing marginal productivity. d. is downward sloping because prices fall when the producer increases output and because of diminishing marginal productivity.