Deadweight losses are the only potential cost associated with tariffs, which is why they are preferred to quotas
Indicate whether the statement is true or false
FALSE
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A regional airport decides to extend a runway, increasing the amount of noise pollution on nearby homes. Assume that an optimal corrective tax can be applied
Should that tax be paid as compensation to the nearby homeowners? How might compensating the homeowners change their (and potentially others) incentives?
The University of Iowa was voted the #1 "party school" in 2013 . The University of Iowa is located in Iowa City. At the end of August each year, the market demand for beer in Iowa City
a. decreases. b. increases. c. remains constant, but we observe a movement downward and to the right along the demand curve. d. remains constant, but we observe a movement upward and to the left along the demand curve.
Consider a Cournot oligopoly consisting of five identical firms producing good X. If the firms produce good X at a marginal cost of $7 per unit and the market elasticity of demand is ?3, determine the profit-maximizing price.
A. $7 per unit B. $5.25 per unit C. $4.20 per unit D. $7.50 per unit
Which of the following is NOT true about a cartel?
A) Members earn economic profits. B) Members experience large economies to scale relative to industry demand. C) Cartels will set common prices for their members. D) Members of a cartel will have production quotas.