If there are external costs of production and firms do not have to account for these costs, then the firms will ________ and ________ compared with the efficient values.
A. underproduce; overprice
B. overproduce; overprice
C. underproduce; underprice
D. overproduce; underprice
Answer: D
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Suevania opens its doors to trade with Barvania. Barvania has a comparative advantage in the production of machinery. Hence, once trade occurs, Suevania's consumers will buy ________ machinery and pay ________ before
A) more; a higher price than B) more; a lower price than C) less; a higher price than D) less; a lower price than E) the same amount of; the same price as
A major tax revision occurred in the 1980s. Between 1981 and 1986, the top marginal tax rate for the federal personal income tax
a. decreased from 70 percent to 20 percent b. increased from 50 percent to 75 percent c. decreased from 70 percent to 31 percent d. increased from 31 percent to 50 percent e. decreased from 50 percent to 15 percent
If government taxes a firm which pollutes this will
a. increase the demand for the good produced. b. decrease the supply of the good produced. c. increase the equilibrium quantity of the good produced in the market. d. decrease the equilibrium price of the good produced in the market. e. all of the above.
Which statement about the United States at present is false?
A. We have the world's largest economy. B. The United States' federal deficits have been at record highs for the last few years. C. The Social Security and Medicare trust funds are safe for at least the next two generations. D. We are borrowing almost $2 billion a day from foreigners to finance the United States' trade and budget deficits.