An externality exists whenever
a. the economy cannot benefit from government intervention.
b. markets are not able to reach equilibrium.
c. a firm sells its product in a foreign market.
d. Bobbi engages in an activity that influences the well-being of Rosa and yet Bobbi neither pays nor receives payment for that influence.
d
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The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient level of output
A) is achieved. B) can be achieved by giving paper producers a subsidy. C) can be achieved by imposing a Pigovian tax on paper producers. D) cannot be achieved.
An increase in resources available would decrease potential GDP and the long-run aggregate supply curve
Indicate whether the statement is true or false
If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):
a. upward movement along the supply curve for cigarettes. b. rightward shift of the supply curve for cigarettes. c. downward movement along the demand curve for cigarettes. d. leftward shift of the supply curve for cigarettes.
Which of the following is not a common effect of imposing a rent control?
a. Discriminatory practices by landlords. b. More time on waiting lists and searching for housing. c. A "black market" for rentals. d. An excess supply of rentals at the controlled price.