The government prefers a market-based approach to reduce firms' emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day. The most efficient policy under these circumstances is likely to be a system of
a. per-unit taxes on emissions of the gas.
b. per-unit taxes on the goods produced by firms that emit the gas.
c. subsidies to firms that agree not to emit the gas.
d. sales of permits to emit specified quantities of the gas on specified days.
d
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Suppose consumer cannot taste the difference between Miller Lite and Bud Light, but Miller Lite is sold in 12 ounce cans while Bud Light is sold in 8 ounce cans. In a graph with cans of Miller Lite on the horizontal and cans of Bud Light on the vertical axis, which of the following is the correct slope for this consumer's indifference curves:
A.
B.
C.
D.
What is the substitution effect?
What will be an ideal response?
Within different price ranges along a linear demand curve, elasticities are:
a. constant. b. different. c. equal. d. the same as slope. e. negative 1.
In the events of the housing bubble collapsing, once the housing prices stopped increasing refinancing:
A. was no longer an option, and a wave of foreclosures occurred. B. no longer allowed people to borrow cash on the new value of their home, and spending slowed. C. became less popular, and people's consumption overall dropped. D. became more popular, and people's consumption accelerated overall.