Let the production function be q = ALaKb. Returns to scale are equal to

Which of the following is the best example of a "free" good?

A) HIV/AIDS cocktails freely distributed to people in developing countries B) The air you are currently breathing C) Public roads D) Public schooling in states where education is subsidized

Suppose Motorland's government imposes a tax of $1.50 per gallon of gasoline sold. With the tax, the market will

A) underproduce by 0.2 million gallons of gasoline a month. B) underproduce by 0.1 million gallons of gasoline a month. C) overproduce by 0.1 million gallons of gasoline a month. D) produce the efficient quantity of gasoline.