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, then we expect:
A. a leftward shift of Johnson's supply curve.
B. a rightward shift of Johnson's supply curve.
C. no change in Johnson's supply curve.
D. a leftward shift in the demand curve for Johnson's rubber.
Answer: A
You might also like to view...
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
The Coase theorem proves that externalities will be neutralized by bargaining
Indicate whether the statement is true or false
The statistical indicators of business cycle changes contain
a. leading indicators. b. lagging indicators. c. roughly coincident indicators. d. All of these.
The total amount of outstanding IOUs a nation is obligated to repay other nations and international organizations is called
a. current account b. balance of payments c. international trade d. international debt e. capital account