If a policymaker wants to raise revenue by taxing goods while minimizing the deadweight losses, he should look for goods with ________ elasticities of demand and ________ elasticities of supply.
a. small, small
b. small, large
c. large, large
d. large, small
Answer: a. small, small
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Explain the statement "There is no such thing as a free lunch."
What will be an ideal response?
Why does a consumer spend the entire budget?
What will be an ideal response?
A monopolistically competitive industry is characterized by having no barriers to entry.
Answer the following statement true (T) or false (F)
Refer to the data provided in Table 16.3 below to answer the following question(s).Table 16.3 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution.Table 16.3Firm AFirm AFirm AFirm BFirm BFirm BReduction of Pollution by Firm AMC of reducing pollution for Firm ATC of reducing pollution for Firm AReduction of Pollution by Firm BMC of reducing pollution for Firm BTC of reducing pollution for Firm B1$8 $81$16$16212202 24 40318383 32 72426644 401125361005 48160Refer to Table 16.3. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. If firms are allowed to trade
permits, what is the total cost of the pollution reduction? A. $0 B. $60 C. $104 D. 110