Examples of transfer payments are
A) wages, profits, and rents.
B) Social Security checks and unemployment insurance payments.
C) salaries of educators, police, and firefighters.
D) federal government spending for national defense.
B
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If the price of orange juice rises 10%, and as a result the quantity demanded falls by 10%, then one can conclude that the demand for orange juice
A) is perfectly elastic. B) is inelastic. C) has a unitary elasticity. D) has a constant elasticity.
Governments often subsidize activities that generate positive externalities in order to get people to engage in more of them
a. True b. False
A firm is said to have monopoly power
a. it if produces the quantity at which MR = MC. b. if it produces the quantity at which P = MC. c. when it can influence the price of its product d. if it tries to monopolize a market e. if it is the only firm that hires a particular kind of labor
Tradable emissions permits are used to:
a. reduce sulfur dioxide emissions by requiring firms to pay a pollution tax. b. encourage firms to reduce sulfur dioxide emissions by allowing the sale of excess permits. c. decrease consumption as the producer passes the full cost of the permit onto the consumer. d. impose a tax on SO2 emissions that is paid by the firm and is a source of tax revenues for the federal government.