Suppose that there is a negative externality associated with alcohol consumption in the United States (e.g., costs of publicly funded alcoholism treatment centers). What will happen to the social costs of this externality if the United States eliminates all tariffs on alcohol imports?
a. The social coasts will increase.
b. They will not change.
c. They will decrease.
d. The social costs will increase but be offset by the private losses associated with increased imports as the tariffs are eliminated.
Ans: a. The social coasts will increase.
You might also like to view...
The Fed can implement open market operations
A) more rapidly than changes in reserve requirements, but less rapidly than changes in the discount rate. B) more rapidly than changes in the discount rate, but less rapidly than changes in reserve requirements. C) less rapidly than either changes in the discount rate or changes in reserve requirements. D) more rapidly than either changes in the discount rate or changes in reserve requirements.
Monetarists assume that suppliers of labor
a. always have perfect information about the real wage. b. base their decisions on the expected real wage. c. may or may not know the real wage. d. could not possibly have perfect information.