A corrective tax equal to the external cost imposed on third parties levied on polluters will:
a. eliminate all pollution
b. increase the level of pollution.
c. force polluters to internalize the external cost resulting from their actions.
d. usually have no impact whatsoever on pollution levels, but will generate tax revenue for the government.
c
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Which is the most likely effect upon the market for cotton of a significant improvement in the quality of synthetic textiles?
A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged. B) A decrease in demand and hence a decrease in the price of cotton and an increase in the quantity exchanged. C) A decrease in demand and hence an increase in the price of cotton and a decrease in the quantity exchanged. D) A decrease in both demand and supply and hence a decline in the quantity exchanged but no predictable change in the price of cotton.
Jill's utility from an additional dollar increases more when she has $400 than when she has $200. From this, we can conclude that Jill
A) has an increasing marginal utility of wealth. B) has a decreasing marginal utility of wealth. C) is risk neutral. D) has a negative marginal utility of wealth.