Refer to Table 13-2. What is Eco Energy's profit?
A) $125 B) $140 C) $145 D) $150
C
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A liability rule:
A. involves the use of taxes or fees to remedy negative externalities. B. involves the use of subsidies to remedy negative externalities. C. is a legal principle requiring a party who takes an action that harms others to compensate the affected parties for some or all of their losses. D. requires that victims of an externality pay a tax to the producers of the externality.
Neoclassical economists believe that the government fosters economic growth by providing a stable economic environment with a low rate of ____________ and tax rates that are low and unchanging.
a. importing b. growth c. unemployment d. inflation
Price floors
A) provide free market incentives for producers. B) create surpluses by setting the price above equilibrium. C) create shortages by setting the price above equilibrium. D) are used by advocates of the free market.
Refer to Scenario 3.3 below to answer the question(s) that follow.SCENARIO 3.3: -Mustard and mayonnaise are substitutes. -Mustard and relish are complements. -Mustard is a normal good. -During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves.Refer to Scenario 3.3. The mustard recall would have caused the equilibrium price of mayonnaise to ________ and the equilibrium quantity of mayonnaise to ________.
A. decrease; decrease B. increase; increase C. decrease; increase D. increase; decrease