Assume that production from a automobile manufacturer caused acid rain. If the government imposed a tax on the manufacturer equal to the cost of the acid rain, the government's action would
A) externalize the externality.
B) eliminate all acid rain.
C) force the manufacturer to move production to another location.
D) internalize the externality.
D
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If toothpaste manufacturers compete in a monopolistically competitive market, then: a. firms are price takers
b. firms try to differentiate their products from those of competitors. c. firms maximize profits by choosing output where price equals marginal cost. d. there are significant barriers to entering the toothpaste industry.
When the Fed raises the discount rate, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans c. increases the amount of excess reserves that banks hold, allowing them to make more loans d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
In the monetarist transmission mechanism, changes in the money market directly affect aggregate demand
Indicate whether the statement is true or false
Figure 8.2 presents a firm's marginal cost, average total cost, and average variable cost curves. The firm minimizes average total costs by producing ________ units.
A. 50 B. 100 C. 150 D. 200