A lump sum tax can create an excess burden.

The supply of labor in the classical system is a function of the

a. marginal product of labor. b. real wage. c. the public's preference for leisure. d. money wage. e. b and c

The above figure shows the marginal benefit to a firm of polluting in the local river while producing its output, and the marginal cost to the firm's neighbor. The marginal cost of production is zero for the firm

If there is just one neighbor who owns the river, how much pollution is likely to occur? A) 0 units B) 500 units C) 1000 units D) more than 1000 units.