Answer the following questions true (T) or false (F)
1. Suppose the government mandates the installation of a certain type of pollution abatement equipment for the leather tannery industry. For some firms in the industry, installing this equipment may not be the most cost effective method of reducing pollution.
2. When the government imposes a tax equal to the external cost of producing a product that causes pollution, the government is said to externalize the externality.
3. A.C. Pigou argued that the government can deal with a positive externality in consumption by giving consumers a subsidy equal to the value of the externality.
1. TRUE
2. FALSE
3. TRUE
You might also like to view...
When the price level in the United States rises relative to the price level of other countries, ________ will rise, ________ will fall, and ________ will fall
A) net exports; exports; imports B) net exports; imports; exports C) exports; imports; net exports D) imports; exports; net exports
The fallacy in the strict crowding-out argument comes from supposing that
a. the Federal Reserve always accommodates the U.S. Treasury in its financing of the deficit. b. corporations always outbid small businesses for government contracts. c. the economy's flow of saving is fixed. d. investors will spend more when G increases.
The downward slope of the production possibilities curve demonstrates:
a. the law of increasing opportunity cost. b. the law of comparative advantage. c. the law of diminishing marginal utility. d. the law of absolute advantage.
The import tariffs that President Bush placed on imported steel likely had what effect?
A. Both domestic steel consumers and foreign steel producers were helped. B. Domestic steel producers were helped, but domestic steel consumers were hurt. C. Foreign steel producers were helped, but domestic steel consumers were hurt. D. Both domestic steel producers and domestic steel consumers were helped.