In order to internalize the externality due to pollution, the government should impose a tax based on
A) the economic damage associated with the pollution.
B) the physical amount of pollution.
C) the size of the firm causing the pollution.
D) the value of the pollution-causing business activity.
Answer: A
Economics
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A negative supply shock causes ________ to ________
A) aggregate demand; increase B) aggregate demand; decrease C) short-run aggregate supply; decrease D) short-run aggregate supply; increase
Economics
If a price ceiling is not binding, then a. there will be a surplus in the market
b. there will be a shortage in the market. c. the market will be less efficient than it would be without the price ceiling. d. there will be no effect on the market price or quantity sold.
Economics