When the government imposes taxes on buyers and sellers of a good, society loses some of the benefits of market efficiency
a. True
b. False
Indicate whether the statement is true or false
True
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When external costs are present and the government imposes a tax equal to the marginal external cost, then
A) efficiency can be achieved. B) transaction costs will be high. C) the marginal benefit of the external cost will fall. D) property rights must have already been established.
For most goods and services the income elasticity of demand is
A) negative. B) positive. C) invisible. D) inverse.
For which pair of firms would a merger be horizontal?
a. Avis Rentals and United Airlines b. Rawlings and Nike c. Barnes and Noble and Wordsworth Booksellers d. Starbucks and Baskin and Robbins e. Samuel Adams and Samsonite
Suppose that a new advertising campaign extolling the virtues of apple juice is successful, and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?
A. The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice falls. B. The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice rises. C. The equilibrium price of apple juice rises and the equilibrium quantity of apple juice might rise or fall. D. The equilibrium price of apple juice falls and the equilibrium quantity of apple juice might rise or fall.