If a firm is forced to take external costs into account, it will
A) reduce production and charge a higher market price.
B) increase production and charge a lower market price.
C) reduce prices and hire more workers.
D) reduce prices and hire fewer workers.
Answer: A
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Economists are often concerned with the free-rider problem
a. What is meant by free riding? Explain with an example. b. Are public parks subject to the free-rider problem? What about keeping city streets clean? Explain your answer.
The Long-Run Phillips Curve is vertical, suggesting that ________
A) allowing inflation to rise will not succeed in keeping unemployment low B) changes in unemployment have no lasting impact on inflation C) shifts of the short-run Phillips curve impact inflation, but have no effect on unemployment D) all of the above E) none of the above
Supply-side economics calls for:
a. lower taxes on businesses and individuals. b. regulatory reforms to increase productivity. c. government subsidies to promote technological advance. d. All of these.
If people cannot distinguish between goods A and B, then economists describe the goods as
a. having a zero cross elasticity b. being perfect substitutes c. belonging to an oligopolistic industry d. belonging in different markets e. having a cross elasticity of one