Which of the following is a method used by government to cope with the situation in which production of a good creates an external benefit?
A) removing property rights
B) subsidizing production
C) marketable permits
D) running a lottery
E) imposing Coasian taxes
B
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Refer to Table 9-11. With trade, what is the total gain in hat production?
A) 150 B) 300 C) 400 D) 650
A disadvantage of functional finance is that it: a. does not focus on producing the potential level of output in an economy
b. increases the level of unemployment during recessions. c. allows chronic deficits that magnify into national debt, allowing it to reach an alarming level. d. requires that the budget is balanced even during times of war. e. magnifies fluctuations in the business cycle.
The Earned Income Tax Credit is an example of a
a. minimum-wage law. b. price ceiling. c. wage subsidy. d. rent subsidy.
Exhibit 21-1 Production possibilities curves
?
In Exhibit 21-1, the production possibilities curves of wheat and corn for Nabia and Pada are presented. Suppose Nabia produces at point A on its PPC. How many units of wheat is the country able to produce?
A. 15. B. 60. C. 40. D. 20.