If a negative externality exists, __________ in order for the socially optimal output to be reached.
A. supply needs to increase
B. supply needs to decrease
C. demand needs to increase
D. b and c
E. none of the above
Answer: B
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When a nation exports a good, its ________ surplus decreases and its ________ surplus increases
A) consumer; total B) consumer; consumer C) producer; producer D) producer; consumer E) total; consumer
The excess supply created when the government imposes a price floor
a. shifts the equilibrium price upward to the price ceiling level b. is the difference between the quantity demanded at the old equilibrium price and quantity supplied at the price set by the price ceiling c. is the difference between the quantity demanded at the price set by the price ceiling and quantity supplied at the old equilibrium price d. is the difference between the quantity supplied and the quantity demanded at the price set by the price ceiling e. is the difference between the old equilibrium price and the price set by the price ceiling
Firms in a high-wage nation such as the U.S. can compete effectively with imports from low-wage nations if
a. skill levels are identical in the nations b. the U.S. reduces tariffs on imports c. low-wage nations impose tariffs on U.S. made goods d. labor productivity is higher in the low-wage nation e. labor productivity is higher in the U.S.
The most efficient taxation system is a tax system that
A. is highly progressive. B. maximizes tax revenues. C. minimizes the total tax burden. D. minimizes the overall excess burden.