When government corrects a market with an externality present by allowing participants to buy up to the point where their net benefit is zero, they must be:
A. imposing a tariff.
B. offering a Coase tax.
C. mandating a quota.
D. imposing a tax.
D. imposing a tax.
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An adverse supply shock that is permanent shifts which curve in addition to the curves shifted by one that is temporary?
A) The LM curve B) The IS curve C) The FE line D) The labor demand curve
What are the roles of Federal Reserve district banks?
What will be an ideal response?
The price-output combination that maximizes profits for a monopolist occurs at the point where
A. total revenues and total costs are equal. B. total revenues are the greatest. C. the difference between total revenues and total costs is the greatest. D. the elasticity of demand equals one.
Which of the following is an example of internalizing an externality?
A) a paper mill that spends money removing the pollution it generated B) a neighbor leaving lots of trash in his front yard C) a student receives $15 for each bright question asked during lecture D) Both A and C.