A tax may be used as a corrective device in the case of a negative externality because it will __________ marginal private costs and __________ supply.
A. increase; decrease
B. increase; increase
C. decrease; decrease
D. decrease; increase
Answer: A
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Refer to Figure 7.1. Start from initial equilibrium. If firms increase their capital stock, the new real wage could be ________ and the new amount of labor employed could be ________
A) X; A B) Z; A C) X; C D) Z; C
Which of the following statements is most correct?
A. The discount rate is the primary policy tool of the FOMC. B. The difference between the target and actual federal funds rate is the dealer's spread. C. The FOMC sets the target federal funds rate range. D. The FOMC sets the federal funds rate.
The efficient quantity of a public good is provided when the economy's
A) total benefit from the good equals its total cost. B) total benefit from the good is less than its total cost. C) marginal social benefit from the good equals its marginal social cost. D) marginal social benefit from the good is greater than its marginal social cost.
Use Figure 9-7 to answer questions a-j
a. If there is no quota what is the domestic price of almonds and what is the quantity of almonds demanded by consumers? b. If there is no quota how many kilos of almonds would domestic producers supply and what quantity would be imported? c. If there is no quota what is the dollar value of consumer surplus? d. If there is no quota what is the dollar value of producer surplus received by producers in Bragabong? e. If there is no quota what is the revenue received by foreign producers who supply almonds to Bragabong? f. With a quota in place what is the price that consumers of Bragabong must now pay and what is the quantity demanded? g. With a quota in place what is the dollar value of consumer surplus? Are consumers better off? h. With a quota in place what is the dollar value of producer surplus received by producers in Bragabong? Are domestic producers better off? i. Calculate the revenue to foreign producers who are granted permission to sell in Bragabong after the imposition of the quota. j. Calculate the deadweight loss as a result of the quota.