Which of the following is the government most likely to discourage because of the existence of externalities?
A. Thermal pollution from a power plant that improves fishing downstream.
B. All goods and services produced by monopolies.
C. Foods that taste good.
D. Cars that create an excessive amount of exhaust fumes.
Answer: D
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Allison's Auto Art is a company that applies pinstripes to vehicles. Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service
For a total price of $175, Allison will apply a fancier 3-color pinstripe application to an automobile, a service that adds an additional $40 to the total cost of the package. Should Allison continue to offer the 3-color pinstripe application? A) No, her marginal benefit is less than her marginal cost. B) Yes, she still makes a profit by selling the 3-color application. C) yes, but only if she lowers the price of the 1-color application D) More information is needed for Allison to make this decision.
How much would Samantha be willing to pay for the insurance?
a. $1000 b. $1100 c. $2500 d. $2600
Which of the following taxes is based on the ability-to-pay principle?
a. Road taxes paid by the buyers of gasoline b. Progressive income taxes that pay for scientific research c. Payroll taxes that pay for Social Medicare d. Education taxes paid by parents
Use the list of items below to answer the question that follows.1.Money market mutual funds held by individuals 2.Savings deposits, including money market deposit accounts 3.Currency held by banks 4.Currency held by the public 5.Shares of corporate stock 6.Small time deposits 7.Checkable deposits 8.Large time deposits Refer to the above table. The M1 money supply is composed of items:
A. 3, 4 and 7. B. 2 and 7. C. 3 and 4. D. 4 and 7.