Efficiency is reached by allocating resources to those who have the greatest willingness to pay for them. This can be achieved in a market where a negative externality is present by:
A. taxing consumers.
B. giving consumers a subsidy.
C. place a quota at the efficient level.
D. All of these will achieve efficiency.
A. taxing consumers.
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Assuming that travel from New York to Los Angeles is a normal good, a decrease in consumer income, other things being equal, will:
a. decrease the quantity demanded of travel to Los Angeles. b. increase the demand for travel to Los Angeles. c. decrease the demand for travel to Los Angeles. d. increase the quantity of travel to Los Angeles demanded.
For most goods and most people, marginal utility probably
a. continues to increase as larger quantities are purchased. b. plummets after the first few units but soon begins to rise. c. declines as consumption increases. d. is negative after the first unit of a good is purchased. e. is positive and rising for most goods.