A tax may be used as a corrective device in the case of a negative externality because it will __________ marginal private costs and __________ supply.
A. increase; decrease
B. increase; increase
C. decrease; decrease
D. decrease; increase
Answer: A
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How does a quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?
What will be an ideal response?
The marginal factor cost of a monopsonist is
A) upward sloping and the same as the supply curve. B) downward sloping when the supply curve of labor is upward sloping. C) upward sloping and rises faster than the supply curve. D) horizontal.
Graphically, what impact would an increase in the price of jet fuel have on the market for air travel?
a. It would shift the supply curve for air travel to the right. b. It would shift the supply curve for air travel to the left. c. It would shift the demand curve for air travel to the right. d. It would shift the demand curve for air travel to the left.
If real GDP and the GDP deflator both rise, then it must be that nominal GDP rose
a. True b. False Indicate whether the statement is true or false