Government can correct for negative externalities by
A) decreasing taxes.
B) increasing taxes or regulation.
C) allowing the market system to correct the problem.
D) decreasing the costs to those responsible for the externality.
Answer: B
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What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4 percent per year and the annual rate of population growth is 3 percent?
A) 1 percent B) 3 percent C) 87 percent D) 4 percent
One problem with the concept of utilitarianism is that
A) there is a cost to transferring income from the rich to the poor. B) there are increasing marginal costs. C) there are decreasing marginal benefits. D) markets cannot adjust to income redistribution.
The supply curve for land in the city of San Francisco is most likely
A. an upward sloping straight line. B. a downward sloping straight line. C. vertical or perfectly inelastic. D. horizontal or perfectly elastic.
An increase in the stock of capital will cause the
A. economy to move down the production possibility frontier. B. production possibility frontier to shift outward. C. economy to move closer to its production possibility frontier. D. production possibility frontier to shift inward.