The Articles of Confederation and Perpetual Union (1781) adequately addressed the free-rider problems by setting up a tax system that required all states to share the costs of providing national defense, protecting private property rights, regulating
commerce with other countries and across states and upholding a system of laws. Indicate whether the statement is true or false
False
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Refer to Table 9-15. Looking at the table above, real average hourly earnings in 2014 were
A) $9. B) $9.52. C) $10. D) $12.63.
In order for a Pigovian tax to be effective, it must:
A. be imposed on the consumer. B. be imposed on the producer. C. be imposed on those affected by the externality. D. None of these statements is true.
The Cost-Benefit Principle indicates that an action should be taken if:
A. its extra benefit is greater than or equal to its extra cost. B. its average benefits exceed its average costs. C. its net benefit (benefit minus cost) is zero. D. its total benefits exceed its total costs.
Suppose coffee is sold in a monopolistically competitive market, where coffee is differentiated by coffee shop location. As firms enter in the long run and the price of coffee falls:
A. the market quantity of coffee demanded will increase, but the quantity of coffee supplied by any individual coffee shop declines. B. the market quantity of coffee demanded will decrease as does the quantity supplied from any individual coffee shop. C. the average costs of production decline. D. the profits of individual coffee shops increase.