Which of the following is not a regulatory trade restriction?
A. Inspections designed to impede trade processes
B. Vegetables prohibited because of excess pesticide usage
C. A limit on the number of imported cars
D. Leather products banned because of tanning by urine
Answer: C
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To eliminate the inefficiency resulting from pollution that creates an external cost, the government can impose a pollution tax on producers that is equal to the
A) MSB. B) MC. C) marginal external cost. D) MSC. E) price.
The time-inconsistency problem in monetary policy can occur when the central bank conducts policy
A) using a nominal anchor. B) using a strict and inflexible rule. C) on a discretionary, day-by-day basis. D) using a flexible, discretionary rule.
"By producing at an output rate at which marginal revenue equals marginal cost, a firm is definitely making positive economic profits." Do you agree or disagree? Why?
What will be an ideal response?
Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The "optimal" amount of environmental damage would be
a. $0 b. $40 c. $450 d. $500