Realization of gains from trade, entrepreneurial discovery, and investment are largely dependent on
a. competitive elections and political democracy.
b. the presence of institutions and policies consistent with economic freedom.
c. the use of tariffs and quotas to protect domestic businesses from competition with foreigners.
d. the use of government planning to direct investments into worthwhile projects.
B
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A ________ curve means that ________
A) horizontal demand; a change in price does not change total revenue B) horizontal demand; the elasticity of demand is less than 1 C) horizontal supply; the elasticity of supply is infinite D) horizontal supply; the elasticity of demand is infinite E) vertical demand; a change in price does not change total revenue
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.