Suppose the government levies a corrective tax on firms that pollute in order to limit the quantity of pollution. Under this policy, does the demand curve for pollution rights determine the quantity of pollution, or does it determine the price of pollution?
With a corrective tax, the demand curve for pollution rights determines the quantity of pollution.
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Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. Tomaso faces ________ opportunity costs in the production of pizzas and calzones
A) decreasing B) constant C) increasing D) negative
In the context of market structure, the characteristic that best describes a monopolistically competitive market is that:
a. there are few firms in the market. b. the products produced cannot be easily differentiated. c. entry and exit are both difficult. d. firms spend a great deal on advertising and promotion. e. firms spend very little on advertising and promotion.
Which of the following is not true about the housing market?
a. The price of housing will increase or decrease in order to achieve an equilibrium b. An increase in the demand for housing will cause an increase in the quantity supplied of housing c. When the demand for housing increases, the price of housing will increase but the quantity supplied will not increase in the short run d. The housing market is a unique market because most people had to borrow money to buy their homes e. The only way to increase the supply of housing is to build more houses
Which sequence of events accurately captures the wealth effect of a change in the price level?
a. Price level changes, interest rate changes, and quantity of real GDP demanded changes. b. Consumer spending changes, price level changes, and net exports change. c. Investment changes, interest rate changes, and net exports change. d. Price level changes, consumer spending changes, and quantity of real GDP demanded changes.