In the case of a negative externality, in order to achieve efficiency the government must set the _________________ equal to the marginal ____________________.
A. tax; external costs
B. tax; external benefits
C. subsidy; external costs
D. subsidy; external benefits
E. tax; private costs
Answer: A
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Which of the following is most easily excludable?
A) ideas B) capital C) technology D) a set of designs or instructions
To decrease anxiety in its most accomplished teachers, a school decides to offer them tenure, to help them concentrate on teaching better. Instead it notices that even the best of the teachers started to get sloppy with their work. The school did not foresee
a. Adverse selection b. Moral hazard c. All of the above d. None of the above
When a government reduces its deficits by increasing taxes, in the short run,
A) output returns to potential. B) output increases. C) interest rate is higher. D) IS curve shifts inward to the left.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, an increase in unemployment may be represented by the movement from
A. B to A. B. A to C. C. C to D. D. B to D.