A public good
A. Is overproduced by the market.
B. Is any good produced by the government.
C. Is subject to the free-rider dilemma.
D. Causes government failure.
Answer: C
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In contrast to the need for legal enforcement under a system of direct controls, a taxes approach
A. is subject to greater uncertainty of payment of fees. B. makes taxes automatic and certain. C. speeds the prosecution and conviction process. D. does not actually reduce pollution, merely the cost of monitoring it.
Suppose that you are earning the maximum amount of money within the 28% tax bracket. If you receive a $1000 raise next year this will place you in the 33% tax bracket. Calculate your tax burden and the amount of increase in your "take-home" pay
What will be an ideal response?
Quotas usually lead to larger deadweight losses than tariffs
Indicate whether the statement is true or false
If an industry has constant marginal and average costs, any shift in demand will eventually
A) result in a higher equilibrium price. B) be met by a smaller change in quantity supplied. C) be met by an equal change in quantity supplied, and equilibrium price will not change. D) make economic profits zero in the short run.