Refer to Figure 5-11. S1 represents the supply curve that reflects the private cost of production and S2 represents the supply curve that reflects the social cost of production
One way to internalize the external cost generated by utilities is to impose a Pigovian tax on the production of electricity. What is the size of the Pigovian tax that will internalize the cost of the externality?
A) P2-P0 B) P1-P0 C) P2-P1 D) P0
A
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Refer to the information below. If the firms' managers form a price -fixing cartel that maximizes the firms' total profit, what is the total economic profit made by all firms?
A small nation has three gasoline suppliers with a linear monthly market demand equal to: Q = 500,000 - 5P. Each firm's marginal cost (MC) and average total cost (ATC) curves are horizontal at $10,000 per month. A) 3,375,000,000 B) $10,125,000,000 C) $575,000,000 D) $54,000,000
If the Fed increases the money supply and people fully anticipate this change, they will immediately incorporate the disinflationary impact of the Fed's policies into their current wage and price decisions
a. True b. False Indicate whether the statement is true or false
The message of the ultimatum game is that:
A. people pursue self-interest and the good of the group suffers. B. people like to make threats. C. sometimes concerns of fairness top rational selfishness. D. people pursue self-interest and the good of the group is served.
Suppose chicken farm waste flowed into a river used by a neighbor for drinking water. The results of the Coase theorem s are relevant when the legal rights to the river are given to:
a. the chicken farm. b. the neighbor. c. either the chicken farm or the neighbor. d. neither the chicken farm nor the neighbor