A policy maker has argued for higher taxes on gasoline to reduce the negative externalities associated with driving. This policy will lead to a relatively ________ reduction in driving if demand is ________.
A. small; perfectly elastic
B. small; relatively inelastic
C. large; relatively inelastic
D. large; perfectly inelastic
Answer: B
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What will be an ideal response?
Businesses demand funds because
A) they prefer earlier consumption to later consumption. B) they have deficits to cover. C) they prefer to purchase capital goods in the current year. D) they make investments that they believe will increase productivity and profitability.
Refer to the information provided in Figure 16.2 below to answer the question(s) that follow.
Figure 16.2Refer to Figure 16.2. What is the total damage imposed as a result of producing the market (unregulated) level of cars?
A. $250 B. $350 C. $500 D. $700
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What will be an ideal response?