Suppose that electricity producers create a negative externality equal to $5 per unit. Further suppose that the government gives a $5 per-unit subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of electricity to be produced?
a. They are equal.
b. The equilibrium quantity is greater than the socially optimal quantity.
c. The equilibrium quantity is less than the socially optimal quantity.
d. There is not enough information to answer the question.
b
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Assume that a high proportion of recent college graduates decides to stay in school seeking advanced degrees, rather than confront the challenge of landing a good job in the midst of generally high unemployment
What is the direct impact of this behavior on (a) the labor force participation rate, (b) the employment ratio, and (c) the unemployment rate?
Which of the following statements is correct?
a. The average tax rate gauges the sacrifice made by a taxpayer, whereas the marginal tax rate gauges the distortion of taxes on consumer decisions. b. The marginal tax rate gauges the sacrifice made by a taxpayer, whereas the average tax rate gauges the distortion of taxes on consumer decisions. c. The average tax rate measures how much the tax system discourages people from working. d. The marginal tax rate measures total taxes paid divided by total income.
Monopolization of both the labor market and the output market results in
A) higher wages than when both are competitive. B) a higher output price than when both are competitive. C) a lower level of output than when both are competitive. D) All of the above.
The more firms in an industry and the more equal their size, the larger the HHI
Indicate whether the statement is true or false