Let MC be the marginal private cost per megawatt hour (Mwh) of producing electricity using coal. Let MSC be the marginal social cost per Mwh and T be the tax per Mwh. To achieve efficiency, the tax should be set so that
A) MC = MSC + T.
B) MSC = MC + T.
C) MC + MSC = T
D) MC = T.
B
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Firms that exhibit price-taking behavior
A) wait for other firms to set price, take it as given, and charge a higher price. B) have outputs that are too small to influence market price and thus take it as given. C) take pricing behavior in their own hands. D) are independently capable of setting price.
During the last four decades,
a. the total expenditures of Americans on health care have been relatively constant. b. the share of health-care expenditures covered by a third party (either the government or an insurance company) has increased substantially. c. the prices of health-care services have risen but not as rapidly as the general level of prices. d. health-care providers have lowered prices in response to the rapid increase in medical technology.
Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?
a. natural rights b. property rights c. input control d. collective control
Measurement of economic values after adjustments have been made for changes in the average of prices between years in known as
A. a deflator. B. real values. C. nominal values. D. the price index.