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Question
Refer to the above supply and demand graph. In the graph, point A is the current equilibrium level of output of this product and point B is the optimal level of output from society's perspective. S is the supply curve without a tax and St is the supply curve with a tax. This figure indicates that there is (are):
A.positive externalities created in the production of this product.
B.negative externalities created in the production of this product.
C.an underallocation of resources to product production.
D.a surplus of the good produced.
Answer
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Related questions
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If the price of product L increases, the demand curve for close-substitute product J will:
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C. shift to the right.
D. remain unchanged.
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If two goods are complements:
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B. an increase in the price of one will increase the demand for the other.
C. a decrease in the price of one will increase the demand for the other.
D. they are necessarily inferior goods.
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Q:
In presenting the model of a demand curve, economists presume the most important variable in determining the quantity demanded is:
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According to the text, what is the largest source of earned income for U.S. households?
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According to the text, U.S. corporations generate approximately what percentage of total sales revenue?
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In the circular economic flow diagram, households:
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Refer to the above figure. If box A represents businesses and box D represents the product market in this circular flow model, then money flow in the model would be represented by:
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Q:
Refer to the above figure. If flow (1) is the cost businesses pay to the resource market, then:
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Refer to the above figure. If box A represents businesses and flow (7) represents goods and services, then:
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D. box C is the product market and box B is the resource market.
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Refer to the above table. If demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5), equilibrium price and quantity will be:
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Q:
Suppose that corn prices rise significantly. If farmers expect the price of corn to continue rising relative to other crops, then we would expect:
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Q:
The term "quantity demanded":
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The quantity demanded of a product increases as its price declines because the:
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Q:
Suppose an excise tax is imposed on product X. We would expect this tax to:
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B. decrease the demand for complementary good Y and increase the demand for substitute product Z.
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Q:
If there were a market for pollution rights established by a public agency that determined the amount of pollution that the atmosphere or a body of water can safely absorb, and the agency sold these rights to polluters, we could expect that:
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Q:
In a market economy with well-defined property rights, the potential threat of a lawsuit or a liability judgment against a firm will give firms an incentive to:
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B.increase negative externalities from production.
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Q:
One condition for individual bargaining to occur, according to the Coase theorem, is that there must be:
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Q:
Refer to the above supply and demand graph. Point A represents the current equilibrium level of output of this product and point B represents the optimal level of output from society's perspective. If government decides to correct this externality with a subsidy to consumers, then the:
A.demand curve will shift from D2 to D1.
B.supply curve will shift from S1 to S2.
C.demand curve will shift from D1 to D2.
D.supply curve will shift from S2 to S1.
Q:
When producing a good generates negative externalities, the private market for that good tends to produce too:
A.much of the product at too low a price.
B.much of the product at too high a price.
C.little of the product at too low a price.
D.little of the product at too high a price.
Q:
In a free-market economy, a product that entails a spillover benefit will be:
A.overproduced.
B.underproduced.
C.produced at the optimal level.
D.associated only with goods and services provided by the government.