A pollution tax would be preferable to a system of transferable permits when
a. The marginal costs of damages are steep and the marginal costs of pollution reduction are relatively stable
b. The marginal costs of damages are steep and the marginal costs of pollution reduction are steep
c. The marginal costs of damages are relatively stable and the marginal costs of pollution reduction are relatively stable
d. The marginal costs of damages are relatively stable and the marginal costs of pollution reduction are steep
e. The marginal costs of damages are elastic and the marginal costs of pollution reduction are also elastic
Ans: d. The marginal costs of damages are relatively stable and the marginal costs of pollution reduction are steep
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The government expenditure multiplier and the tax multiplier are
A) different in size and the tax multiplier is larger. B) not comparable because the government expenditure multiplier applies to aggregate supply and the tax multiplier applies to aggregate demand. C) different in size and the government expenditure multiplier is larger. D) identical in size. E) not comparable because the government expenditure multiplier applies to aggregate demand and the tax multiplier applies to aggregate supply.
Suppose that the U.S. government gives foreign aid to Turkey. This transaction would directly
A) increase the U.S. current account. B) decrease the U.S. current account. C) increase the U.S. capital and financial account. D) decrease the U.S. capital and financial account.
Suppose the production of paved roadways can be represented as q = L0.5 + K0.5. Which of the following statements is (are) TRUE?
A) Labor is subject to diminishing marginal productivity in the short run. B) Labor and capital are imperfect substitutes. C) The isoquants for paved roadways are convex. D) All of the above.
As a result of current laws banning the sale of human organs, the supply of human organs ______ as demand increases.
a. steadily rises b. steadily declines c. remains constant d. sharply rises