The tax on gasoline
a. reduces efficiency by causing large deadweight losses.
b. reduces efficiency by decreasing consumer surplus and producer surplus.
c. enhances efficiency by serving as a corrective device in a market with positive externalities.
d. enhances efficiency by serving as a corrective device in a market with negative externalities.
d
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A straight-line demand curve along which the price elasticity of demand equals 0 is one that
A) forms a 45 degree angle with the vertical axis. B) forms a 60 degree angle with the horizontal axis. C) is vertical. D) is horizontal.
In the above figure, the opportunity cost of moving from point A to point C is
A) 50 guitars. B) 0 guitars. C) 25 guitars. D) 50 ukuleles.
A resource's earnings are all economic rent when the resource has no alternative uses
a. True b. False
A good is considered to be a public good if it
a. is a good produced by the government sector. b. is both nonrival-in-consumption and nonexcludable. c. benefits only a small group of consumers but is very costly to produce. d. is a good whose production is financed by tax revenue.