An optimal corrective tax levied on polluters will:
A. not generate enough revenue to pay for the cost of the damage resulting from pollution that occurs at the efficient output of the good.
B. decrease pollution to zero.
C. be equal to the marginal cost of their actions imposed on third parties.
D. increase the supply of polluting goods.
Answer: C
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When nations attempt to move quickly from central planning to a market system, they face the obstacle of high transaction costs in large part because
A) market systems are unnatural and require careful design. B) people who have lived under socialism lack the basic skills a market system requires. C) people who have long lived under socialism are not sufficiently individualistic. D) the experience of socialism makes people distrustful of one another. E) they lack many of the institutions that develop over time in a market system.
Which of the following is true for a monopolistically competitive firm in long-run equilibrium?
A) P > MR and MC = ATC. B) P = ATC and MR = MC. C) P = ATC and P = MC. D) P > ATC and P > MR.
During 1980 through 2010,
a. the per capita income of high-income industrial countries declined. b. the fastest growing economies in the world were LDCs. c. almost all LDCs grew more rapidly than the high-income industrial economies. d. most of the countries with rapid growth rates during the last two decades were located in South America.
The old lyric "the best things in life are free"
a. is not true for any goods. b. is even true for some goods that have a price. c. refers to goods provided by nature or the government. d. refers to goods provided by the market.