The problem of excess pollution mainly occurs because of
A) asymmetric information.
B) a positive externality.
C) a negative externality.
D) a monopoly.
Answer: C
You might also like to view...
The bias in the CPI affects government outlays because the overstatement of inflation
A) means that tax receipts are less than what is needed to cover government outlays. B) decreases government outlays by more than what is justified. C) increases government outlays by more than what is justified. D) decreases social welfare benefits. E) increases fiscal pressure.
Suppose the market clearing price for gasoline is $3.75 per gallon. Now suppose that policy makers pass a law requiring that the maximum price that can be charged is $2.75 per gallon. Such a situation is an example of
A) a price control that will lead to a surplus of gasoline on the market. B) a price floor that will lead to a shortage of gasoline on the market. C) a price ceiling that will lead to a shortage of gasoline on the market. D) a price floor that will lead to a surplus of gasoline on the market.