Consumer spending is considered a determinant of economic growth
a. True
b. False
Indicate whether the statement is true or false
False
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Answer the following statement(s) true (T) or false (F)
1. A Pigou tax forces car manufacturers to internalize the cost of pollution. 2. Cap and Trade is so named because the government puts a “cap” on the amount of exports that domestic firms are allowed to “trade” with foreign nations. 3. A Cap and Trade system is more prone to error than a Pigou tax. 4. Pigou taxes are unnecessary in the presence of transaction costs. 5. Pigovian analysis indicates that a subsidy should be awarded when economic activity creates social benefits.
Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that we observe Joe staying open 6 hours per day
If he is following the marginal principle, what must his marginal cost per hour be? A) $16 B) $24 C) $32 D) $48
Homogeneous goods are ________
A) perfect complements B) perfect substitutes C) similar but not identical D) always inferior
Why is the Big Mac a good indicator of purchasing power parity?
What will be an ideal response?