The biggest difference between using a Pigovian tax or a tradable allowance to correct for a negative externality is:
A. the tax creates an efficient outcome, and the tradable allowances do not.
B. the government collect revenues from the tax, and the private parties trade quota rights on their own.
C. the tax maximizes total surplus, but the tradable allowances do not.
D. All of these are differences between the two government policies.
Answer: B
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The tradeoff between inflation and unemployment
a. implies that policies designed to reduce unemployment also reduce inflation. b. was eliminated by improved economic policies in the 1900s. c. is a long-run tradeoff, persisting for decades, according to most economists. d. None of the above are correct.
We can conclude that international trade is beneficial because, regardless of whether the country imports or exports a good, the overall increase in well-being outweighs the losses associated with trade
a. True b. False Indicate whether the statement is true or false