A rain barrel is a container that captures and stores rainwater for landscape and garden use during dry periods. Rain barrels provide an external benefit to the community through water conservation. What can the government do to equate the equilibrium quantity of rain barrels and the socially optimal quantity of rain barrels?
a. impose a tax on rain barrels that is equal to the per-unit externality
b. offer a subsidy on rain barrels that is equal to the per-unit externality
c. encourage homeowners to bargain with rain barrel producers
d. nothing
b
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If expectations are formed rationally, then individuals
A) will have a forecast that is 100% accurate all of the time. B) change their forecast when faced with new information. C) use only the information from past data on a single variable to form their forecast. D) have forecast errors that are persistently low.
When the fox is guarding the henhouse, that is an example of the
A) share-the-gains, share-the-pains theory. B) regulatory hypothesis. C) capture hypothesis. D) creative theory.
Unions have had an impact on U.S. firms by supporting all of the following types of legislation except
A. Health and education programs. B. Civil rights legislation. C. National security laws. D. Minimum wage laws.
One advantage of a partnership over a corporation is:
A. greater accountability. B. increased ability to get funds. C. the ability to share the work and risks of business. D. limited liability.