Refer to Negative Externality. According to a Pigovian analysis of this externality, when a tax of $5 per unit is imposed on the firms in this industry, the external costs created by the firms' production will equal
The following questions refer to the accompanying diagram, which shows the effects of a negative externality created by an industry's production. The equilibrium quantity in the absence of any attempt to internalize the externality is QE, and the optimal quantity according to a Pigovian analysis is QO.
a. area C + D + E + G + H.
b. area C + D + G + H.
c. area C + G.
d. zero.
c. area C + G.
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Which of the following statements is true?
A) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in quantity demanded. B) If demand increases and supply decreases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater. C) An increase in demand causes an increase in equilibrium price; the increase in price causes supply to increase. D) If both demand and supply decrease, there must be a decrease in equilibrium price; equilibrium quantity may either increase or decrease.
An economic recession in Japan will cause the aggregate demand curve in the United States to shift to the right
a. True b. False Indicate whether the statement is true or false
Federal, state, and local taxes
A. have been falling as a share of GDP since the 1970s. B. have been increasing as a share of GDP since the 1970s. C. are about a quarter of GDP. D. are about one-third of GDP.
In which of these years was the U.S. poverty rate the highest?
A. 1960 B. 1970 C. 1980 D. 1990