The government prefers a market-based approach to reduce firms’ emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day. The most efficient policy under these circumstances is likely to be a system of
A. per-unit taxes on emissions of the gas.
B. per-unit taxes on the goods produced by firms that emit the gas.
C. subsidies to firms that agree not to emit the gas.
D. sales of permits to emit specified quantities of the gas on specified days.
Answer: D
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Over the past year, output grew 5%, capital grew 5%, and labor grew 1%. If the elasticities of output with respect to capital and labor are 0.5 and 0.5, respectively, how much did productivity grow?
A) 0.5% B) 1.0% C) 1.5% D) 2.0%
Policymakers generally are:
A. more concerned about structural deficits than cyclical deficits. B. more concerned about cyclical deficits than structural deficits. C. not concerned about structural or cyclical deficits. D. equally concerned about structural and cyclical deficits.
Of the following examples, the sales for ______ will most likely be affected by the health of the economy.
a. drain cleaner b. towels c. dishwashing liquid d. popcorn
Economists measure the degree to which consumers win when Walmart comes to a city by looking at changes to
A. consumer spending. B. producer surplus. C. elasticity of demand. D. consumer surplus.