If the government runs an ad campaign to shame litterers, they are:
A. wasting a lot of money.
B. trying to get individuals to internalize the negative externality created by their decision to litter.
C. using protectionist policy to help the trash-collecting industry.
D. All of these statements are true.
B. trying to get individuals to internalize the negative externality created by their decision to litter.
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Refer to Figure 9-4. Under autarky, the consumer surplus is area
A) R + S + V. B) S. C) R. D) S + V.
The user cost of an exhaustible resource is
A) the same as its price. B) the same as its production cost. C) the opportunity cost of using the resource today rather than saving it for the future. D) the amount of the resource that is extracted today. E) not related to the amount of the resource that exists.
If a small country imposes a tariff on imported motorcycles
A. the surplus of both the domestic producers and consumers of motorcycles will decline. B. the surplus of both the domestic producers and consumers of motorcycles will increase. C. the surplus of the domestic producers of motorcycles will increase, but the surplus of the domestic consumers will decline. D. the surplus of the domestic producers of motorcycles will decline, but the surplus of the domestic consumers will increase.
The Fed engages in open market operations and sells government securities. The result is
A) lower interest rates. B) higher interest rates. C) interest rates remain unchanged since there is no reason to think bond prices changed. D) uncertain since more information is needed.