When the government imposes a tariff on imported goods, it _____________ prices for domestic consumers, ________________ consumers' surplus and _________________ the producers' surplus for domestic producers
A) raises; lowers; raises
B) lowers; raises; raises
C) lowers; raises; lowers
D) raises; lowers; lowers
E) none of the above
A
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Which of the following statements is false?
A. A positive externality is internalized if the person that generated the externality incorporates into his or her own private cost-benefit calculations the external benefits that third parties receive. B. Internalizing externalities is not the same as adjusting for externalities. C. An externality has been completely internalized if the socially optimal output emerges. D. Assigning property rights is one way to internalize externalities.
What do a rubbernecking traffic jam and the paradox of thrift have in common?
A. In both cases, individual behavior has large negative consequences for the whole of society. B. In both cases, seemingly bad behavior ends up harming everyone. C. In both cases, seemingly careless behavior leads to good times for all. D. In both cases, government intervention can only make matters worse