Which of the following statements is true of both pollution permits and corrective taxes?
a. Both policies internalize the externality of pollution.
b. Both policies require firms to pay for their pollution.
c. Both policies lead to the establishment of an equilibrium price of pollution.
d. All of the above are correct.
d
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Refer to the Article Summary. Economists refer to an increase in sales due to celebrity endorsements as being the result of
A) social influence. B) the ultimatum game. C) network externalities. D) the endowment effect.
According to the Rybczynski theorem, at constant world prices, if a country experiences a gain in its capital stock it will produce
A) more of the capital intensive good and less of the labor intensive good. B) more of both goods. C) less of the capital intensive good and more of the labor intensive good. D) less of both goods.
Automated teller machines
A) are more costly to use than human tellers, so banks discourage their use by charging more for use of ATMs. B) cost about the same to use as human tellers in banks, so banks discourage their use by charging more for use of ATMs. C) cost less than human tellers, so banks may encourage their use by charging less for using ATMs. D) cost nothing to use, so banks provide their services free of charge.
The Federal Reserve was originally created to
a. stabilize exchange rates b. keep the unemployment rate at 0% c. create jobs d. issue bonds e. create and regulate the U.S. money supply