If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set
A) equal to the marginal external cost at the economically efficient level of pollution.
B) equal to the marginal private cost of production at the economically efficient level of pollution.
C) equal to the amount of the deadweight loss created in the absence of a pollution tax.
D) at a level low enough so that producers can pass along a portion of the additional cost onto consumers without significantly reducing demand for the product.
Answer: A
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Defenders of advertising argue that it is not rational for profit-maximizing firms to spend money on advertising for products that have
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A country has national saving of $50 billion, government expenditures of $30 billion, domestic investment of $10 billion, and net capital outflow of $40 billion. What is its supply of loanable funds?
a. $20 billion b. $30 billion c. $50 billion d. $60 billion