Why do most economists favor emissions taxes over direct controls as a pollution deterrent?
Direct controls require monitoring and enforcement; pollution taxes are automatic and certain. Direct controls do not consider which firms can reduce pollutants at the lowest cost; whereas taxes encourage the lowest-cost firms to switch to alternative technology and avoid the tax.
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Banks experience interest rate risk
A) if adverse selection problems are particularly severe. B) if moral hazard problems are particularly severe. C) on any investment that has high information costs. D) if changes in interest rates cause bank profits to fluctuate.
The U.S. balance of trade has been in a large surplus since 2001
a. True b. False Indicate whether the statement is true or false
When GDP is measured in "current prices" it is known as the
A) real GDP. B) nominal GDP. C) real GNP. D) nominal GNP.
Amy spends $5,000 on remodeling a storefront that she then opens as a take-out deli. Business has not been very successful, and she needs an additional $1,000 to keep the deli open. Which of the following is TRUE?
A) The $5,000 Amy spent on remodeling represents a part of the total variable cost of her business. B) The $5,000 Amy spent is a fixed cost of her business. C) The $1,000 represents her marginal costs of production. D) The $1,000 Amy needs to keep the deli open represents her total fixed costs.