Researchers have found that LED light bulbs use significantly less energy than incandescent light bulbs while producing the same amount of light. However, producing LED light bulbs is significantly more costly than producing incandescent light bulbs. In order to encourage light bulb manufacturers to produce more LED light bulbs, which of the following is most likely to happen?
A. The government will tax LED light bulbs.
B. The government will impose a tax on incandescent light bulbs.
C. The government will subsidize LED light bulbs.
D. The government will subsidize the production of incandescent light bulbs.
Answer: B & C.
B. The government will impose a tax on incandescent light bulbs.
C. The government will subsidize LED light bulbs.
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In the figure above, the difference in wage rate between low-skilled and high-skilled labor is
A) $16. B) $8. C) $20. D) $28.
Which of the following applies to the tragedy of the commons? I. In the absence of government action, there is an absence of incentives to prevent the overuse of the common resource. II
When consumers take account of the marginal social benefit and marginal social cost, overuse of the resource occurs. III. Even with government action, it is impossible for an efficient level of output to be achieved. A) I only B) I and II C) II and III D) I, II and III
Which of the following are NOT characteristics of a competitive market?
A) There is freedom of entry and exit. B) There are zero transaction costs. C) There are only one or two sellers. D) Buyers and sellers have complete information.
Prices under an ideal cartel situation will be equal to
A) monopoly prices. B) competitive prices. C) prices under monopolistic competition. D) marginal cost.