A negative externality such as pollution can be corrected by
A) a subsidy to producers.
B) a tax on producers.
C) a subsidy to consumers.
D) a stimulus to production.
Answer: B
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In the long run, the exit of firms from a perfectly competitive market is caused by
a. a steeper demand curve constraining the firm b. normal profits c. economic losses d. antitrust enforcement e. government policy
Employment discrimination is a source of
a. economic inefficiency. b. increased economic growth. c. innovation. d. shifting production possibilities. e. All of the above are correct.
A $5 tax levied on the buyers of pants will cause the
a. supply curve for pants to shift down by $5. b. supply curve for pants to shift up by $5. c. demand curve for pants to shift down by $5. d. demand curve for pants to shift up by $5.
If a price decrease of a product significantly raises its revenues, then the absolute price elasticity of demand for that product must be
A. an example of unit elasticity. B. greater than one. C. less than one. D. equal to one.