The benefits of economic growth are ________, while the costs of economic growth are ________.
A. increased output per person; less future consumption
B. increased output per person; too small for concern
C. more current consumption; less future consumption
D. increased output per person; the consumption sacrificed in exchange for capital formation
Answer: D
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Suppose that smoking creates a negative externality. If the government imposes a per-cigarette tax equal to the per-cigarette externality, then
a. the after-tax equilibrium quantity of cigarettes smoked will be less than the socially optimal quantity of cigarettes smoked. b. the after-tax equilibrium quantity of cigarettes smoked will be greater than the socially optimal quantity of cigarettes smoked. c. the after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked. d. There is not enough information to answer the question.
An example of the specificity rule in action is
A. imposing price floors on "clean" products as a way to increase the demand for these products. B. taxing the production of a product whose production creates a great deal of pollution. C. taxing the consumption of a product whose production creates a great deal of pollution. D. restricting imports to reduce environmental pollution.