Suppose that smoking creates a negative externality. If the government imposes a per-cigarette tax equal to the per-cigarette externality, then
a. the after-tax equilibrium quantity of cigarettes smoked will be less than the socially optimal quantity of cigarettes smoked.
b. the after-tax equilibrium quantity of cigarettes smoked will be greater than the socially optimal quantity of cigarettes smoked.
c. the after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked.
d. There is not enough information to answer the question.
c
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A 45-degree line on a graph with expenditures, E, on the vertical axis and production, Y, on the horizontal axis, represents
A) the line of disequilibrium levels of income. B) all possible equilibrium levels of production and expenditures. C) some of the equilibrium levels of production and expenditures. D) None of the above.
In sophisticated analysis of rent differences
a. quality of land is assumed away. b. quality of land is recognized and considered. c. rates of return are assumed away. d. returns on land and capital are assumed to be similar.
Investment is the amount by which ____ grows.
A. portfolio B. income C. earnings D. capital
Two months ago, the Marbury Shirt company sold 200 shirts at $30 per shirt. Last month the company raised its price to $35 per shirt and sold 200 shirts. Evidently the company experienced a(n):
a. Increase in demand b. Decrease in supply c. Increase in supply d. Decrease in demand