Which of the following is considered a classic example of an externality?
a. pollution
b. monopoly
c. sunlight
d. inflation
a. pollution
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How does a production quota influence farm prices and output?
What will be an ideal response?
An optimal corrective tax should be placed on _____
a. the sellers of the externality-generating activity b. the inputs into the externality-generating activity c. the externality-generating activity d. the purchasers of the output of the externality-generating activity
Use sticky-wage theory to explain why an increase in the expected price level shifts the aggregate supply curve
Empirical evidence shows that in response to the 2008 and 2009 tax rebates, consumers spent 50% to 90% of the amounts they received. This suggests that
A. Okun's law holds. B. budget constraints are not binding. C. Ricardian equivalence does not hold. D. people do not understand economics.