Corrective taxes work by ______.
a. internalizing external costs
b. externalizing internal costs
c. subsidizing moral hazards
d. criminalizing adverse selection
a. internalizing external costs
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Vertical integration can reduce transaction costs through all of the following ways except which one?
A) increasing the complexity of coordination B) decreasing the incentive for litigation C) decreasing search cost D) increasing information and control
An example of capital is a tractor used by a farmer
Indicate whether the statement is true or false
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Assume the firms in an oligopoly produce a differentiated product and are initially colluding
If each firm begins to cheat (to increase sales) by underpricing the other firms, as the amount of cheating increases, the resulting industry price and output will approach the outcome for: A) perfect competition. B) monopolistic competition. C) noncooperative monopoly. D) noncooperative oligopoly.