Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good. All of the following will result from the tax except
A) an increase in the equilibrium market price.
B) a decrease in the equilibrium quantity produced and consumed.
C) a decrease in market supply of the good.
D) an increase in demand for the good.
Answer: D
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What will be an ideal response?
The above figure shows the relationship between the price of a slice of pizza and how many slices of pizza Ricardo buys in a week. Between points A and B, the slope of the line is ________ the slope of the line between points B and C
A) greater than B) equal to C) less than D) unrelated to E) not comparable to
Other things the same, if prices fell when firms and workers were expecting them to rise, then
a. employment and production would rise. b. employment would rise and production would fall. c. employment would fall and production would rise. d. employment and production would fall.
Which group of policies aims at discouraging rivals from starting a price war?
A. Peak-peak pricing, two-part pricing, and price matching B. Price matching and randomized pricing C. Price matching, brand loyalty, and commodity bundling D. Randomized pricing, price discrimination, and cross-subsidization