Assume that an additional $50,000 in benefits will be received each year if a town hires an additional police officer whose only job would be to catch drivers who drive over the speed limit on its only street. What must the additional cost of this
additional police officer be to make this hiring economically rational?
What will be an ideal response?
The additional cost of the additional police officer must be no more than $50,000 for the year to make the hiring economically rational.
Economics
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If the government sets a specific tax and an ad valorem tax so that they raise the same amount of tax revenue, why does the ad valorem tax reduce output less than the specific tax?
What will be an ideal response?
Economics
As prices change, the elasticity of supply describes the movement
A) of a shift in the supply curve. B) of the equilibrium price. C) along the supply curve. D) from a necessity to a luxury good.
Economics