Consumer surplus is price less willingness to sell.
Answer the following statement true (T) or false (F)
False
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Suppose that a government agency is trying to decide between two pollution reduction policy options. Under the permit option, 100 pollution permits would be sold, each allowing emission of one unit of pollution. Firms would be forced to shut down if they produced any units of pollution for which they did not hold a permit. Under the pollution tax option, firms would be taxed $250 for each unit of pollution emitted. The regulated firms all currently pollute and face varying costs of pollution reduction, though all face increasing marginal costs of pollution reduction. Suppose the regulators chose the permit policy instead of the tax policy. What might explain that decision?
A. Permit auctions raise more revenue than do taxes. B. The permit policy will reduce pollution by more than would the tax policy. C. The permit policy allows regulators to achieve reduction goals without having detailed knowledge about firms' abatement costs. D. Firms prefer the permit policy because it allows them to choose the least-costly reduction technology.
Q: How many economists does it take to change a light bulb?
A: All. Because then you will generate employment, more consumption, moving the aggregate demand curve to the right. This joke represents the view of A) classical economists. B) economists who contend that money illusion never occurs. C) Keynesian economists. D) economists who conclude that wages and prices are very flexible.
The chartering process is similar to ________ potential borrowers and the restriction of risk assets by regulators is similar to ________ in private financial markets
A) screening; restrictive covenants B) screening; branching restrictions C) identifying; branching restrictions D) identifying; credit rationing
A disadvantage of having an annually balanced budget is that government spending would have to: a. allow the national debt to burgeon with chronic deficits
b. decline during a recession to offset the increase in tax revenues. c. rise during a recession to match the increase in tax revenues. d. rise during an expansion to offset the decline in tax revenues. e. decline in a recession to match the decrease in tax revenues.