In the above figure, in order to promote an efficient allocation of resources, the government could grant a subsidy equal to
A) zero.
B) $5 per unit.
C) $10 per unit.
D) $15 per unit.
C
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The quality adjustment bias of the CPI refers to the failure of statisticians to:
A. take into account price changes in goods and services. B. allow for the possibility that consumers switch from products whose prices are rising. C. take into account improvements in goods and services. D. allow for the possibility that consumers switch stores at which they shop.
Many people believe that pure monopolies charge any price they want to without affecting sales. Instead, the output level for a profit-maximizing pure monopoly occurs where ________.
A. marginal cost equals average revenue B. average total cost equals average revenue C. marginal revenue equals average cost D. marginal revenue equals marginal cost
The optimal public policy to correct for negative pecuniary externalities is _____
a. corrective taxation and compensation b. subsidization c. corrective taxation without compensation d. nothing
To enforce the optimum level of emissions a government could set an emissions standard at the quantity
A) where the MSB curve crosses the MCA curve. B) located at the vertical intercept of the MSB curve. C) located at the horizontal intercept of the MSB curve. D) located at the vertical intercept of the MCA curve. E) located at the horizontal intercept of the MCA curve.