Suppose a product produces substantial spillover costs. If the government adopts a policy that forces producers to bear those costs:
a. the equilibrium quantity of the product exchanged will fall.
b. the initial misallocation of resources will be corrected
c. the equilibrium price of the product will rise.
d. all of the above will be true.
d
You might also like to view...
Answer the following statement(s) true (T) or false (F)
1. When both players have dominant strategies, there is only one Nash equilibrium. 2. The Battle of the Sexes game has two Nash equilibria, neither of which is Pareto optimal. 3. All outcomes in the Copycat Game are Nash equilibria. 4. A solution concept is any way of analyzing a game which leads to the discovery of a Nash equilibrium which solves the game. 5. The concept of Nash Equilibrium is an important solution concept because it helps make predictions.
The law of demand implies, holding everything else constant, that as the price of gelato
A) increases, the demand for gelato will increase. B) decreases, the demand for gelato will increase. C) decreases, the quantity of gelato demanded will increase. D) increases, the quantity of gelato demanded will increase.
Which of the following statements describes a shortage?
a. At a lower price, the quantity demanded is below the quantity supplied. b. At the existing price, the quantity demanded is below the quantity supplied. c. At a higher price, the quantity demanded exceeds the quantity supplied. d. At the existing price, the quantity demanded exceeds the quantity supplied.
In contrast to the typical Republican Party laissez-faire policies, President Richard Nixon in 1971 introduced
A. mandatory drug testing of cabinet officers. B. monetary targets for the Federal Reserve Board. C. wage and price controls. D. mandatory gold purchases by the U.S. Treasury.