The goal of industrial policy should be that
a. industries yielding the largest positive externalities should receive the biggest subsidies.
b. any industry that produces negative externalities should be heavily taxed.
c. any production process that produces negative externalities should be shut down.
d. all industries that produce positive externalities should be equally subsidized.
a
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A price elasticity of demand of -0.67 implies
a. Demand is inelastic b. Demand is elastic c. Demand is unitary elastic d. Demand is perfectly elastic
Holding other things constant, a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to _____________ and the supply for Shilling to __________
a. Increase; decrease b. Increase, increase c. Decrease; Increase d. Decrease; Decrease
Sugar is an input used to produce cereal. Suppose that the price of sugar rises. As a result
A) the supply curve for sugar will shift to the right.
B) the supply curve for sugar will shift to the left.
C) the supply curve for cereal will shift to the right.
D) the supply curve for cereal will shift to the left.
When regulators identify with the special interests of the industry they regulate, this behavior conforms with the
A. lemon market hypothesis. B. rate-of-return hypothesis. C. capture hypothesis. D. share-the-gains, share-the-pains hypothesis.