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
b
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Immigration significantly contributed to economic growth in the U.S. throughout the entire period between Independence and the Civil War
Indicate whether the statement is true or false
What three factors did Keynes identify that affect consumption expenditures?
a. Disposable income, expected future income, and wealth or credit b. Total income, expected future income, and wealth or credit c. Disposable income, inflation rate, and wealth or credit d. Total income, expected future income, and inflation rate
If you save less because the government is going to tax you and later provide you with a benefit, then this reduction in savings is referred to by economists as the
A. asset substitution effect. B. induced retirement effect. C. slovenly effect. D. bequest effect.
Suppose a cup of coffee at the campus coffee shop is $2.50 and a cup of hot tea is $1.25 and that a student's beverage budget is $20 per week. What is the market tradeoff between coffee and tea?
a. 1 coffee to 1 tea b. 2 coffee to 1 tea c. 1 coffee to 2 tea d. 2 coffee to 2 tea