A consequence of a negative externality is that social costs __________ private costs, and the efficient level of output __________
A) equal; does not require any type of government intervention
B) are less than; requires the government to create a subsidy
C) are greater than; requires the government to impose a tax
D) are greater than; requires the government to create a subsidy
E) are less than; requires the government to impose a tax
C
You might also like to view...
In a certain economy, the components of aggregate spending are given by:C = 60 + 0.6(Y - T) - 1,000rI = 200 - 1,000rG = 200NX = 50T = 100Given the information about the economy above, what would be the impact on short-run equilibrium output of a one-percentage-point increase in the real interest rate from 4 percent to 5 percent?
A. Short-run equilibrium output would decrease by 2,000 units. B. Short-run equilibrium output would decrease by 20 units. C. Short-run equilibrium output would increase by 55 units. D. Short-run equilibrium output would decrease by 50 units.
In an economy where the poorest quintile of the population receives 5 percent of the income, the Lorenz curve at the quintile
a. is the diagonal b. registers 5 percent of the income c. lies above the diagonal d. registers 95 percent of the income e. of the richest quintile must be 95 percent of the income
The supply of loanable funds is determined by all of the following except
A. Risk. B. Time preferences. C. Demand for loanable funds. D. Interest rates.
The condition in an economy that makes a "rationing device" a necessity is:
A) the economy is organized around free markets. B) the economy is centrally planned by the government. C) scarcity exists. D) there are fewer types of goods than there are people in the economy.