The production of steel in a factory generates a negative externality. A per-unit tax on the factory that equals ________ of steel production will internalize the externality entirely
A) the marginal private cost
B) the marginal social cost
C) the marginal external cost
D) the marginal external benefit
C
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All else being equal, if the prospect of a recession leads the Federal Reserve to ease monetary policy, the equilibrium value of the exchange rate for the U.S. dollar will:
A. fall. B. either rise or fall depending on whether the supply or demand for dollars changes more. C. remain fixed. D. rise.
Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological change
Indicate whether the statement is true or false
A drug interdiction program that successfully reduces the supply of illegal drugs in the United States likely will
a. raise the price, reduce the quantity, decrease total revenues, and decrease crime. b. lower the price, increase the quantity, increase total revenues, and increase crime. c. raise the price, increase the quantity, decrease total revenues, and increase crime. d. raise the price, reduce the quantity, increase total revenues, and increase crime.
The primary purpose of NAFTA is to
A. Ensure that there are no losers as the result of trade agreements between Mexico, Canada, and the United States. B. Encourage the development of the Mexican and Canadian economies at the expense of U.S. workers and consumers. C. Increase income in Mexico, Canada, and the United States by encouraging free trade. D. Protect U.S. and Canadian workers from unfair competition from Mexico.