A difficulty with using a uniform per-unit tax to address a negative externality is that
A) the tax will reduce output.
B) the tax will increase price.
C) the social cost of pollution might vary across geographic regions.
D) the social cost of pollution should not be assessed on the consumers, but should be assessed on the firms.
Answer: C
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When a variable is determined by a factor outside of the function or model being evaluated, it is said to be
A) endogenous. B) exogenous. C) unexplained. D) statistically insignificant.
An expenditure maximizing multi-product firm will set the same relative prices as a welfare maximizing firm
Indicate whether the statement is true or false
Probably the most important factor affecting material well-being is
a. inflation rates. b. unemployment rates. c. budget deficits. d. growth in productivity. e. monopoly power.
A monopolistic competitor would face a demand curve with a
A) positive slope. B) negative slope. C) constant slope. D) slope equal to 0.