Figure 16.1A firm that generates pollution is illustrated in Figure 16.1. If the government would like to induce this firm to abate, or reduce, its pollution by A1 tons, it will impose a pollution tax equal to:
A. P1.
B. P1 minus P3.
C. P2.
D. P2 minus P3.
Answer: A
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If the term structure of interest rates in two countries differ, the differences reflect
A) expected price levels over time. B) expected GDP differences. C) the absence of covered interest arbitrage. D) expected exchange rate changes over time.
Normative economics deals with ____ and positive economics deals with ____
a. what should be; what is b. fiction; fact c. microeconomics; macroeconomics d. negative aspects; positive aspects e. changing circumstances; same circumstances
If a bank subject to a 10% required reserve ratio has $10,000 in excess reserves, it can extend, at a maximum, which quantity of new loans?
A. $1,000 B. $9,000 C. $10,000 D. $100,000
A monopolist will never produce at a quantity where the:
A. MR < 0. B. MR > 0. C. P > MR. D. MR= MC.