A tax on cigarettes will have the effect of properly dealing with the externality unless the tax

A. is so high that it generates a black market.
B. causes people to use smoke less.
C. is lower than the marginal external costs.
D. is lower than the marginal external costs, or it is so high that it generates a black market.


Answer: D

Economics

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If a product is a normal good, an increase in your income will

A) increase demand for the product. B) decrease demand for the product. C) increase supply of the product. D) decrease supply of the product.

Economics

Explain why a comprehensive tax reform that aims to eliminate loopholes while promising to lower rates for everyone is the best opportunity for an efficiency-enhancing tax reform

What will be an ideal response?

Economics

In the United States, there are a number of programs that provide goods and services, such as food, medical care, and housing, to the poor. How could income standards be changed, in light of these programs, to better reflect absolute poverty? a. The income standards should not change because these programs provide goods and services, not money. b. The income standards should be increased, since

it costs money to provide these goods and services. c. The income standards should be increased, because these programs will affect the relative measure of poverty. d. The income standards should be decreased, since program recipients require less income to meet a minimum standard of living.

Economics

The hallmark of Clintonomics was first to reduce the budget deficit

a. True b. False Indicate whether the statement is true or false

Economics