Figure 9.9 depicts a market for electricity. S1 is the supply curve without the external costs. S2 is the supply curve with the $T tax. Assume electricity production incurs external costs. If the government imposes a pollution tax of $T per mega watt:
A. the supply curve will shift to the right.
B. the supply curve will shift to the left.
C. demand curve will shift to the right.
D. demand curve will shift to the left.
Answer: B
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On the graph above, at the point where quantity demanded equals quantity supplied (let's call it point A), the economy has reached its ________
A) general equilibrium, and barring any shocks, it will not move from A B) long-run equilibrium, and barring any shocks, it will not move from A C) short-run equilibrium, and even without any shocks, it may move away from A D) short-run equilibrium, and barring any shocks, it will not move from A E) none of the above
The opportunity cost of holding money is
A) zero. B) the inflation rate. C) the real interest rate. D) the nominal interest rate.
What do economists mean when they state that a good is scarce?
a. There is a shortage or insufficient supply of the good at the existing price. b. It is impossible to expand the availability of the good beyond the current amount. c. People will want to buy more of the good regardless of the price of the good. d. The amount of the good that people would like exceeds the supply freely available from nature.
In 1946 the average tariff rate in the United States was around ___________ percent, while the average tariff in 2012 was about ____________ percent
A) 14.0; 2.4 B) 18.7; 12.8 C) 40.0; 1.8 D) 30.2; 21.0