In order to achieve an efficient result a pollution tax must:
A. be equal to the external cost generated.
B. not be passed through to the consumers of the produced good.
C. be equal to the social cost of production.
D. be shared equally by the producer and the consumer of the produced good.
Answer: A
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Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
After trade, at a world price of Pw, total economic surplus equals area(s)
A. A + B + C + D. B. A + B + C + D + E + F + J + I. C. A + B + C + D + E + F. D. D.
If you decide not to spend $1,000 you earned at your summer job but instead intend to buy shares in a mutual fund, in terms of aggregate economic accounting you would be:
A. saving. B. transferring. C. consuming. D. investing.