A uniform tax according to the physical quantities of pollution may not be the appropriate way to correct for an externality because
A) it places a unfair burden on small producers.
B) a uniform tax can only account for social costs and not external costs.
C) a firm will reduce production.
D) it may not adequately account for economic damages.
D
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Deviations from PPP
A) may be due to the differential speed of adjustment between exchange rates and prices. B) may occur when international trade involves lags between order and delivery. C) may appear during periods dominated by news or unexpected events. D) All of the above.
When there are too few or too many resources going to an economic activity
A) a public good exists. B) a market failure exists. C) consumer sovereignty exists. D) a free-rider problem exists.
The statement "The unemployment rate in the U.S. is 5 percent" is
a. a statement of opinion b. a positive statement that can be falsified c. lacking proper microeconomic foundations d. a statistical anomaly e. a philosophical difference of opinions regarding the nature and significance of statistical inference
Which of the following most clearly states the "paradox of thrift"?
a. If households simultaneously attempt to increase their savings, the result may be a reduction in demand, output, and total savings. b. A strong, healthy economy can be achieved if most households are heavily in debt. c. A high savings rate will provide the funds for investment, which is a driving force of long-term economic growth. d. A reduction in savings and an increase in consumption will expand output and employment.