Where a firm generates beneficial externalities, society would be better off if
A. the firm produced a larger output level.
B. the firm reduced its output level.
C. a tax was levied on the firm equal to the dollar amount of the externalities.
D. price was reduced below marginal private cost.
Answer: A
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Capital gains taxation can be justified on equity grounds, but not efficiency grounds
a. True b. False
Which of the following is associated with an increase in the average price level?
a. A decrease in the aggregate quantity demanded b. An increase in the aggregate quantity demanded c. A leftward shift of the aggregate demand curve d. A decrease in the aggregate quantity supplied e. Aggregate quantity demanded remains unchanged but the aggregate expenditures curve shifts leftward.
In 2001, Costa Rican real GDP grew by 5 percent, well above the 2.5 percent trend line of its long-run annual average economic growth rate. In all probability, Costa Rica was in its ________ phase of the business cycle
a. recession b. recovery c. downturn d. prosperity e. trough
Spending VCU4 on real-world goods and services causes the nation's:
a. M2 money supply to remain the same. b. M2 money supply to rise. c. M2 money multiplier to rise. d. M2 money supply to fall.