Give an appropriate remedy for correcting excessive pollution and note any difficulties in implementing it.
What will be an ideal response?
A tax on the polluting activity will help reduce output to the point where P = marginal social cost. Difficulties include the inability to measure the cost of the externality in monetary terms and the wide diffusion of the cost over many individuals.
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What are the categories of total expenditure?
What will be an ideal response?
The debt service ratio is the ratio of
(a) external debt to the size of the service sector. (b) external debt to total GNP. (c) internal debt to the size of the service sector. (d) internal debt to total GNP. (e) none of the above.
Which of the following is correct?
A. SMC = PMC - MD B. MPB = MSB + MEB C. SMC = PMC + MD D. MSC = MPB E. MSB = MSC + MPB
Suppose that the income elasticity of demand for frozen dinners is negative. Other things being equal, which of the following statements is INCORRECT?
A. Frozen dinners are an inferior good. B. The quantity demanded of frozen dinners increases as a consumer's income declines. C. There exists a negative relationship between income and the demand for frozen dinners. D. The share of income spent on frozen dinners must decrease as a consumer's income decreases.