When a firm produces a product that creates external costs
A) the firm produces a level of output larger than would be produced without the external cost.
B) the firm produces a level of output smaller than would be produced without the external cost.
C) the firm produces a level of output which would be the same as it would produce without the external cost.
D) the market provides the efficient level of output even with the existence of the external cost.
Answer: A
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If buyers were required to pay the federal excise tax on gasoline directly to the government, the demand curve for gasoline would shift up
Indicate whether the statement is true or false
When a government earns more than it spends in revenue, we say that it has a:
A. budget surplus. B. budget deficit. C. federal debt. D. federal deficit.