To maximize welfare in a competitive market that has a negative externality in production, government should tax a pollution-generating good at a specific tax equal to the marginal cost of producing the good
Indicate whether the statement is true or false
False. The tax should equal the marginal harm of the pollution at the socially optimal quantity of the good.
Economics
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If the acceptance of Project A makes it impossible to accept Project B, these projects are:
a. contingent projects b. complementary projects c. mutually inclusive projects d. mutually exclusive projects e. none of the above
Economics
The limits of the terms of trade are determined by the:
a. distribution costs in each country. b. stock of foreign exchange in each country. c. average total costs of producing the commodities in each country. d. opportunity costs in each country. e. currency exchange rate between the trading partners.
Economics