When the production of a good creates an external cost, one method of achieving the efficient allocation is to impose a tax such that
A) MC + tax = MSC.
B) MC - tax = MSB.
C) MB + tax = MSC.
D) MB - tax = MSB.
A
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A horizontal merger between two firms occurs when:
a. the products of the merging firms were not related in any manner before the merger. b. one firm is a producer of products, and the other firm is a producer of services. c. one firm is a domestic firm, and the other is a foreign company. d. the firms stood in a buyer-seller relationship before the merger. e. the merger partners were competitors.
If the price of paperback books increases and consumer expenditures on paperback books also increase, which of the following is necessarily true?
What will be an ideal response?
When tariffs are imposed, the losers include
A. Domestic consumers and foreign producers. B. Domestic consumers and domestic producers of import-competing goods. C. Domestic consumers and the domestic government. D. Foreign consumers and domestic producers of import-competing goods.
If producers believe that the increase in their relative prices is small relative to the increase in the general price level, then the slope of the short-run aggregate supply curve will be
A. negative. B. small. C. large. D. zero.