To address the problems created by negative externalities, economists prefer programs that:
A. require government to conserve, using general tax revenues to pay for the program.
B. make people who have the lowest cost of reducing consumption choose to undertake the most reduction.
C. require all people to reduce consumption equally.
D. make people who have the lowest benefit of reducing consumption choose to undertake the most reduction.
Answer: B
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Congress could encourage investment spending through changes in the
A. nominal interest rates. B. capital gains taxes. C. personal income deduction. D. income tax rate.
Implicit costs
A. Are the value of resources used for which no direct payment is made. B. Are the total opportunity costs of resources and inputs used to produce a good. C. Represent actual monetary payments made for resources used to produce a good such as oil. D. Include only payments to workers and lenders.
An industry in which an increase in industry output is accompanied by an increase in long-run per-unit costs is a(n)
A. increasing-cost industry. B. constant-cost industry. C. break-even cost industry. D. decreasing-cost industry.
If workers enroll in a savings plan and are asked to check a box to opt out of it, we are seeing an example of a nudge involving the:
A. incentive compatibility problem. B. enlightened option. C. default option. D. information option.