The population of a small town is 5,000. There are 4,000 people in the labor force, and 3,000 people are employed. The unemployment rate equals

In a situation where there is no incentive to cut pollution because it will make domestic firms less competitive, it will improve world welfare if:

a. nations impose tariffs on polluters. b. there is an international agreement so that every nation regulates global pollutants and no firms have competitive advantages because of lax pollution laws. c. there is a ban on production until we can scientifically solve our pollution problems. d. we allow the market to work in this case.

Which of the following is not a potential drawback to public provision of public goods?

a. Public provision lacks clear signals about the value of the good being produced, possibly leading to under and over provision of the goods. b. Many collective consumption goods might be overproduced private goods. c. Public provision often implies taxation, which creates an excess burden that might overwhelm any efficiency gains. d. Many collective consumption goods are really impure private goods and thus the efficient level of output is never reached.