A firm that sells at a price below average cost is losing money

An efficient way to get a tire manufacturer to produce the socially optimal output level is

A) to impose a tax to make the tire manufacturer bear the external cost it creates. B) for government to set a quota on the quantity of tires that it can produce. C) to grant a subsidy to enable the manufacturer to internalize the external costs of production. D) to assign property rights to the tire manufacturer.

If a consumer doubles her quantity of ice cream consumed when her income rises by 25%, then her income elasticity of demand for ice cream is

A) 8.0. B) 4.0. C) .25. D) .08.