Which of the following statements is correct?
a. Taxes are more difficult to administer than regulations.
b. Taxes provide incentives for firms to adopt new methods to reduce negative externalities.
c. Command-and-control policies provide incentives for private decisionmakers to solve their problems on their own.
d. Corrective taxes distort incentives.
b
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Regardless of which consumption bundle in her choice set a consumer chooses, she will spend all of her available income.
Answer the following statement true (T) or false (F)
The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the total subsidy paid to tomato farmers?
A) area E B) area B + area C + area D + area F C) area C + area D + area E + area G D) area A E) area F
Deflation:
a. under the current trends will cause consumers' purchasing power to shrink. b. has been persistent in the U.S. economy since the Great Depression. c. was prevalent during the oil shocks of the 1970s. d. none of these choices.
Exhibit 13-4: Market for Healthy Hands Lotion
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In Exhibit 13-4, the makers of Healthy Hands Lotion discovered that the lotion can cause skin reactions, but it doesn't inform the buyers. While the market experiences imperfect information, the price and quantity will be
A. $5.00 and 50 units. B. $4.00 and 40 units. C. $6.00 and 40 units. D. $8.00 and 0 units.