If the revenues from a Pigovian tax are not directed to those who are affected by the externality, the outcome:
A. is efficient and maximizes surplus.
B. is not efficient and does not maximize surplus.
C. is efficient, but does not maximize surplus.
D. is not efficient and maximizes surplus.
A. is efficient and maximizes surplus.
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Which of the following causes the aggregate production function to shift up?
A) An increase in capital stock B) A decrease in the productivity of workers C) An improvement in technology D) An increase in the total efficiency units of labor
For a monopsonist the marginal cost of increasing its workforce will always be greater than the wage rate because
A) there is not good factor substitution in a monopsony. B) the wage rate offered the newest employee must be paid to all workers. C) the industry will be a closed shop. D) a normal rate of return must be paid to the owner.
Consider a Cournot duopoly with the following inverse demand function: P = 50 ? 0.2Q1 ? 0.2Q2. The firms' marginal costs are identical and are given by MCi(Qi) = 2. Based on this information, firm 1 and 2's reaction functions are:
A. r1(Q2) = 120 ? 0.5Q2 and r1(Q2) = 120 ? 0.5Q1. B. Q1 = 240 ? 0.5Q2 and Q2 = 240 ? 0.5Q1. C. r1(Q2) = 120 ? 0.5Q1 and r2(Q1) = 120 ? 0.5Q2. D. Q1 = 240 ? 0.75Q2 and Q2 = 240 ? 0.75Q1.
The M1 definition of the money supply includes all of the following EXCEPT
A. savings accounts. B. transaction deposits. C. currency. D. travelers checks.