If the production of a product creates external costs, there is an ____ to production of that good which the government can correct for by ____
a. overallocation of resources; granting a subsidy
b. overallocation of resources; imposing a per-unit tax
c. underallocation of resources; granting a subsidy
d. underallocation of resources; imposing a per-unit tax
b
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Paying efficiency wages are a way for a company to cut costs and become more efficient, and are therefore lower than market wages
Indicate whether the statement is true or false
It is difficult to say whether welfare "causes" daughters from welfare families to be more likely to participate in the welfare system themselves because
a. the same factors that contribute to a mother's welfare status can also contribute to her daughter's welfare status b. no research has been done on this topic c. economists are unconcerned with questions about welfare status d. if two factors occur together, then one must cause the other e. it is possible that the daughter's welfare status "causes" the welfare programs
Which of the following is true?
a. Taxes and transfers generally increase the income share of the bottom quintile of income recipients, while reducing the share of the top group of earners. b. In a market economy, the distribution of income is determined by the quantity and value of the resources supplied by the various individuals, and nearly half the value of resources owned by the rich was inherited. c. Between 1980 and 2009, the income share received by the highest quintile of earners fell, while the share received by the bottom quintile of earners rose. d. All of the above are true.
At an output of 156, MC = $17, ATC = $17, and MR = $18. At that output the firm is
A. maximizing its profits, but not operating at peak efficiency. B. maximizing its profits and operating at peak efficiency. C. operating at peak efficiency, but not maximizing its profits. D. neither operating at peak efficiency nor maximizing its profits.