In order for a Pigouvian subsidy to be efficient, the amount it costs the government to implement the subsidy must be less than the economic value of the additional externality benefits created by the subsidy.
Answer the following statement true (T) or false (F)
False
Rationale: This is not true because there are other benefits produced by the subsidy -- i.e. the additional consumer and producer surplus.
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Answer the following statement(s) true (T) or false (F)
1. The price of a good accurately reflects the total value it creates for society. 2. The Invisible Hand Theorem shows that competitive markets create the maximum possible social gain, even when all interactions among the markets are taken into account. 3. In an Edgeworth box, all Pareto-optimal allocations lie within the region of mutual advantage. 4. In an Edgeworth box economy, a competitive equilibrium must lie on the contract curve within the region of mutual advantage. 5. The gains from international trade are greatest when a country's autarkic relative prices are similar to the world relative prices.
The recession that set in after December 2007 can be attributed to: a. an increase in expenditure on war
b. a decline in home prices and an increase in foreclosures. c. an increase in terrorist activities. d. crop failures around the world. e. an increase in oil prices in the international market.
A separate legal entity established by two or more companies to pursue shared business objectives.
What will be an ideal response?
The relationship between the wage and the quantity of labor that a given worker is willing to provide is called:
A. individual labor demand. B. market labor demand. C. individual labor supply. D. market labor supply.