When a government establishes a marketable permit program to address environmental pollution, it is actually:
a. imposing a command-and-control regulation
b. providing corrective subsidies to reduce pollution.
c. permitting pollution.
d. imposing corrective taxes to reduce pollution.
c
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An increase in taxes (when Ricardian equivalence doesn't hold) causes the real interest rate to ________ and the price level to ________ in general equilibrium
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
Suppose Sam's Shoe Co. makes only one kind of shoe, which sells for $50 a pair. If they sold 500,000 pairs of shoes, and had a total cost of $1,000,000, what was the company's profit?
A. $40,000,000 B. $24,000,000 C. $1,500,000 D. Not enough information is given to calculate profit.
Private ownership
A) permits owners to buy, sell and derive income from their property. B) permits anyone to use the property with or without permission, compensation or consideration for the owner. C) provides owners with little incentive to conserve for the future. D) permits owners to do anything they want with their property.
The figure above shows the market for a good with an external benefit. If the market is competitive and the government takes no action, the equilibrium quantity is ________ units and the equilibrium price is ________ per unit
A) 8; $150 B) 8; $300 C) 10; $250 D) 10; $100 E) 10; $150