When the production of a good creates external costs,
A. The level of environmental pollution will be lower.
B. Production of the good will be lower.
C. Society's collective well-being will be lower.
D. Profits for the producer of the good will be lower.
Answer: C
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Over twenty years ago the city of Washington D.C. was facing a budgetary shortfall. In a plan to increase tax revenue the mayor and city council agreed to raise the excise tax on gasoline
Typically for goods like gasoline which are price inelastic this should have led to an increase in tax revenue. However, just the opposite happened – tax revenue plummeted! What could explain this seemingly paradoxical result?
When persons underestimate inflation (when actual inflation exceeds the expected rate), actual unemployment will
a. exceed the natural rate of unemployment. b. equal the natural rate of unemployment. c. fall below the natural rate of unemployment. d. increase if the government is running a budget deficit and decrease if a budget surplus is present.
Demand and Cost Data for Sylvie's Shampoo CompanyTable 26.2A Monopolistically Competitive FirmPriceDemand Data QuantityCost Data OutputTotal Cost$2266$96$2077$104$1888$114$1699$126$141010$140Refer to Table 26.2. To maximize profit, Sylvie's Shampoo Company. should produce ________ bottles of shampoo and charge a price of ________ each.
A. 8; $18 B. 7; $20 C. 9; $16 D. 6; $22
Because of the choices people make in the pursuit of profit, new growth theory argues that
A) technology growth slows down in the long-run. B) population growth increases will bring real GDP per person back to subsistence level. C) the capital stock experiences diminishing returns. D) the economy can enjoy persisting economic growth.