A pollution tax is:
a. a positive externality used to offset a negative one
b. a price per unit of discharge of pollution
c. a tax on pollution control equipment
d. itself a form of negative externality
b
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Which of the following items would be considered scarce?
A) water B) diamonds C) potato chips D) All of the above are scarce.
What does the Gauss-Markov theorem prove? Without giving mathematical details, explain how the proof proceeds. What is its importance?
What will be an ideal response?
If banks faced a 100 percent reserve requirement, a $10,000 addition to banking reserves would increase the money supply by:
a. $100 b. $1,000. c. $10,000. d. $100,000.
Which of the following stands true for factors that affect changes in productivity across countries and over time?
a. It is more difficult to measure changes in the quality of goods than changes in the quality of services. b. As energy prices go up, energy-efficient capital goods become obsolete. c. It is believed that productivity grows more slowly in manufacturing industries than in services, because of the less labor-intensive nature of manufacturing industries. d. The key to efficient production is the allocation of resources to their best use. e. The greater the productivity, the more efficient the allocation of resources, and the less developed a country's financial market would be.