The figure above illustrates the problem of overcrowding and external costs experienced during the summer months in the state park
If the market is unregulated, in equilibrium the external cost of visiting the state park is given by the distance between A) points H and G.
B) points I and F.
C) points F and G.
D) points G and K.
C
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In a perfectly competitive market, if P > ATC in the short run, there is apt to be
A) entry of new firms into the market. B) an accounting loss for existing firms. C) an inward shift in the industry supply curve. D) an upward pressure on price.
The crowding-in effect depends on the fact that often a decrease in taxes causes a(n)
A. decrease in interest rates and an increase in the price of existing bonds. B. increase in output, which induces more investment. C. increase in interest rates and a decrease in the price of existing bonds. D. decrease in interest rates and the price of existing bonds.