________ are costs that do not require a monetary payment.
A. Implicit costs
B. Explicit costs
C. Accounting costs
D. All opportunity costs
Answer: A
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A tax on polluting firms
A. would shift the LRAC curve upward. B. would shift the LRAC curve downward. C. would have the same impact on the firm as a subsidy. D. tends to have the perverse effect of increasing pollution.
Which of the following is a major shortcoming of government regulation of business monopoly?
a. The regulators often estimate production costs incorrectly and thus force firms into loss positions. b. The regulators often come to represent the interests of the established firms and use their power to limit competition. c. The regulators usually permit firms to make unusually high accounting profits. d. The regulators, acting in consumers' interests, often force prices so low that even with efficient production techniques the regulated firms lose money.
All points above the budget line are
A) inferior to every point on the budget line. B) preferred to every point on the budget line. C) unaffordable. D) Both answers B and C are correct.
Vertical equity and horizontal equity are associated with
a. the benefits principle of taxation. b. the ability-to-pay principle of taxation. c. taxes that have no deadweight losses. d. falling marginal tax rates.