If the government makes a good illegal and then imposes stiffer penalties on illegal drug buyers than on sellers, the price of the good ________ and the quantity ________
A) falls; increases
B) rises; decreases
C) falls; decreases
D) does not change; decreases
C
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Two companies, Dirty Inc. and Filthy Inc., each of which has access to 5 different production processes, each of which has a different cost and produces a different amount of pollution. The daily costs of the processes and the number of tons of smoke emitted are shown in the table below.Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Dirty Inc. ($/day) $110$200$380$740$1,460 Cost to Filthy Inc. ($/day) $400$430$490$580 $700Suppose pollution is initially unregulated. If the City Council imposes a tax of $91 per day on each ton of smoke emitted, then total emissions will fall to ________ tons of smoke per day.
A. 1 B. 4 C. 2 D. 8
Automatic stabilizers were clearly in evidence during the recession of 2007-2009 as
A) tax revenues and transfer payments both decreased. B) tax revenues decreased. C) tax revenues increased. D) transfer payments decreased.
For a firm in monopolistic competition to undertake product development, the marginal cost of the development must be ________ the marginal benefit of the development to consumers
A) greater than B) less than C) not comparable to D) equal to or less than E) None of the above because a monopolistically competitive firm undertakes product development if the marginal cost of the development is less than or equal to the marginal revenue to the firm from the development.
The figure above shows the housing market in the city of Appleville. A rent ceiling of $650 per month is imposed. With the rent ceiling, the quantity of housing rented in Appleville is
A) 200 units below the efficient level. B) 100 units above the efficient level. C) 300 units below the efficient level. D) efficient.