The Ricardian Equivalence proposition suggests that a tax increase that causes a budget surplus will
A) cause an increase in output.
B) cause no change in output.
C) cause a reduction in output.
D) a reduction in consumption.
B
Economics
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Production of a good produces pollution that is very damaging with each additional unit. A monopoly facing a very elastic demand curve will most likely produce
A) less than the social optimum of the good. B) more than the social optimum of the good. C) the social optimum of the good. D) no externality.
Economics
Returns to scale is a concept that operates
A) only in the short run. B) only in the long run. C) in both the long run and the short run. D) in either the long run or the short run but never both.
Economics