Suppose Johnson's Rubber Factory belches black smoke into the air over the city of Bellowsville. If the city of Bellowsville attempts to internalize the external costs associated with the production of rubber with a pollution tax, we can expect:
A. the price of rubber not to change.
B. the price of rubber to increase.
C. the quantity of rubber demanded to increase.
D. no change in the quantity of rubber demanded.
Answer: B
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An export good is a good produced
A) in the United States and sold in other countries. B) in the United States and sold to foreigners living in the United States. C) in another country and purchased by U.S. residents. D) by foreigners in the United States and purchased by U.S. households. E) in another country and purchased by foreigners not residing in the United States.
Competition exists among sellers only if they
A) all set price equal to marginal cost. B) are price takers. C) are so numerous that no one of them can affect the price by restricting output. D) receive no special privileges from government. E) struggle to satisfy potential buyers.
One Guy's Pizza advertising expenditures are $1,200 and sales are $30,000. When the advertising expenditure increases to $1,400, pizza sales increase to $32,000. The arc advertising elasticity of demand is approximately ________
A) 0 B) 0.1 C) 0.4 D) 2.5 E) 12.5
By requiring that policyholders pay a deductible on a claim, insurers guard against
a. symmetrical information b. adverse selection c. natural selection d. moral hazard e. the winner's curse