The external costs of alcohol consumption are related to, among other things, death and injury related to auto accidents caused by drunk drivers. These costs have been estimated to be about 47 cents per ounce of alcohol consumed. Taxes on alcohol amount to 23 cents per ounce. This suggests that alcohol consumption is (i) greater than the efficient or optimal amount; (ii) should be reduced to zero to eliminate the externality.
A. i and ii
B. i not ii
C. ii not i
D. neither i nor ii
Answer: B
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A) $10,000 B) $90,000 C) $100,000 D) $110,000
Refer to Table 20.1. George is a single taxpayer with an income of $65,000. If George earned one extra dollar of income, he would have paid an additional ________ in income tax
A) $0.19 B) $0.2268 C) $0.27 D) $0.38
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a. an increase in aggregate supply. b. a shift to the right of the LM curve. c. a shift to the right of the LM curve. d. a shift up in the IS curve. e. none of the above.
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a. the short run but not in the long run. b. the long run but not in the short run. c. both the short run and the long run. d. neither the short run nor the long run.