A corrective tax can improve upon the misallocation of resources resulting from an externality _____
a. only if the externality is positive
b. only if it is easy to quantify the external damage
c. transactions costs are low
d. transactions costs are zero
b
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The International Space Station is a joint project of the United States, Russia, Japan, Canada and the European Union. This suggests that _____
a. if the space station is a public good then the optimal size of the sharing group is larger than one country b. each country would have been unable to raise the money to pay for the space station on their own c. there are significant negative externalities involved that should be spread over more individuals d. Australians do not value space exploration
The demand for science fiction novels is elastic. When prices decrease from $10 to $6.50 per novel, total revenue will
a. not change. b. decrease. c. increase. d. either increase or stay the same.
Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000 . Later that year, Tyler sold the car to Camille for $17,000 . By how much did these transactions contribute to U.S. GDP for the year?
a. $18,000 b. $22,000 c. $39,000 d. $57,000
The outcome of a competitive oligopoly:
A. is more efficient than that of a monopolist. B. is more efficient than that of a perfectly competitive outcome. C. is less efficient than that of a monopolist. D. is less efficient than that of colluding oligopolists.