The production of an industrial good in a plant emits harmful gases that cause breathing difficulty. Which of the following will happen if the government imposes a Pigouvian tax on the plant?
A) Marginal external cost will increase.
B) Marginal private cost will fall.
C) The quantity supplied of the good will decrease.
D) The demand for the good will increase.
C
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The fact that resources tend to be specialized is one reason the production possibilities frontier is drawn
A. bowed outward. B. bowed inward. C. as a straight line (but not horizontal). D. as a horizontal straight line.
What are the optimal wage and employment level from the perspective of a union in Figure 31.1?
A. $8; 10 workers. B. $4; 13 workers. C. $5; 16 workers. D. $11; 32 workers.
The difference between scarcity and a shortage is
A) scarcity is caused by poverty and shortages are caused by natural disasters. B) shortages are a type of scarcity caused by natural disasters while scarcity is caused by human errors. C) scarcity always is a part of human life while shortages usually are temporary. D) shortages are always part of human life while scarcity is usually temporary.
William Safire argues that a unilateral free trade policy is a disaster if
A. the governments of the nations’ trading partners practice “helpfulism.” B. infant industries are allowed to expire. C. the national defense is endangered. D. it hurts the poor.