If an emissions tax is imposed but it is less than the optimal Pigouvian tax, then:
a. the marginal social benefit of pollution is greater than the marginal social cost of pollution.
b. the marginal social cost of pollution is greater than the marginal social benefit of pollution.
c. total surplus will be maximized.
d. the amount of pollution will be less than the socially optimal amount.
Ans: b. the marginal social cost of pollution is greater than the marginal social benefit of pollution.
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Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?
A. Yes, it would indicate a larger rise in prices relative to a decrease in output. B. No, since prices are held constant and that would be mathematically impossible. C. Yes, it would indicate a larger rise in output relative to a decrease in prices. D. No, since output is held constant and that would be mathematically impossible.
People tend to give up watching TV in order to study for an exam when the:
a) Marginal utility of studying exceeds the marginal utility of watching TV. b) Marginal utility of watching TV exceeds the marginal utility of studying. c) Wage rate falls. d) Total utility of studying exceeds the total utility of watching TV.
M2 consists of
A) M1 plus currency at the banks. B) M1 plus Federal Reserve notes. C) M1 plus checkable deposits. D) M1 plus saving deposits, small time deposits, and money market funds. E) M1 plus traveler's checks.
Suppose the airplane market is an oligopoly. According to the figure above, if the firms act as a monopolist, the quantity produced will be ________ planes per week and if the firms act as competitors the quantity produced will be ________ planes per
week. A) 6; 12 B) 12; 6 C) 0; 6 D) 12; 0 E) None of the above answers is correct.