Large income differences will be eradicated if the market mechanism is working well
a. True
b. False
Indicate whether the statement is true or false
False
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Consider the production of some industrial good that creates air pollution. The table below gives the marginal social cost (MSC), the marginal cost (MC), and the marginal social benefit (MSB) for each level of output (Q)
Q MSC MC MSB 1 3 2 11 2 6 4 10 3 9 6 9 4 12 8 8 5 15 10 7 6 18 12 6 The inefficient market quantity is ________ and the efficient market quantity is ________. A) 4; 3 B) 6; 3 C) 3; 4 D) 4; 6
Which of the following is NOT necessary for a firm to engage in price discrimination?
A) The firm must be able to identify different types of buyers. B) The firm must be able to separate buyers by preventing resales from one customer to another. C) The firm must produce output for different buyers at different costs. D) The firm must sell a product that cannot be resold.
The supply curve will shift to the left when
A) the supply of the product increases. B) the demand for the product decreases. C) some producers leave the industry. D) the product becomes fashionable.
Suppose that there is a negative externality associated with alcohol consumption in the United States (e.g., costs of publicly funded alcoholism treatment centers). What will happen to the social costs of this externality if the United States eliminates all tariffs on alcohol imports?
a. The social coasts will increase. b. They will not change. c. They will decrease. d. The social costs will increase but be offset by the private losses associated with increased imports as the tariffs are eliminated.