A) Public good demand is found by horizontally adding individual demand curves; private good demand is found by vertically adding individual demand curves.
B) Private good demand is found by horizontally adding individual demand curves; public good demand is found by vertically adding individual demand curves.
C) Both public and private good demand are found by horizontally adding individual demand curves.
D) Both public and private good demand are found by vertically adding individual demand curves.
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B
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A) progressive, leading to a more equitable distribution of income.
B) progressive, like the federal income tax.
C) proportional, because all pay the same rate.
D) regressive, because the tax applies to only a fixed amount of income.
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A) high-income receivers are generally in a better position to shift taxes than are low-income receivers.
B) the transfer system is regressive and it is therefore essential to have an offsetting progressive tax structure.
C) rational consumers spend their first dollars of income on the most urgently desired goods and successive dollars on less essential goods.
D) taxes should be paid for financing public goods in direct proportion to the satisfaction an individual derives from those goods.
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A) There are not enough tickets available to concerts of extremely popular performers.
B) The price of medical care has risen dramatically as a result of the introduction of sophisticated equipment and techniques.
C) Polio shots and chest x-rays provide widespread benefits to the community as a whole as well as to the individuals who get them.
D) Extensive decreases in the prices of electronic equipment resulted in large numbers of bankruptcies in the computer industry.
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A) direct controls.
B) specific taxes.
C) the Coase Theorem.
D) government provision.
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A
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A) the firms' marginal cost of production would increase, and the supply curves within the market would shift to the left.
B) the firms' marginal cost of production would decrease, and the supply curves within the market would shift to the left.
C) the firms' marginal cost of production would increase, and the supply curves within the market would shift to the right.
D) the firms' marginal cost of production would decrease, and the supply curves within the market would shift to the right.
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A) Lucian wants more video games but doesn't buy them because his willingness to pay is less than the equilibrium price in the market.
B) Kara's Kitten Shop won't sell more purebred cats because the equilibrium price in the market is less than it would cost her to provide more.
C) Alex and others in a community want a new outdoor soccer field and are willing to pay to use it, but no private business is willing to build it.
D) Government fixes the price of gasoline, resulting in a shortage.
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A) Wendy is asserting that allocative efficiency is realized in hamburger production, but not productive efficiency. Wendy's assertion cannot be correct.
B) Wendy is asserting that allocative efficiency is realized in hamburger production, but not productive efficiency. Wendy's assertion may be correct.
C) Wendy is asserting that productive efficiency is realized in hamburger production, but not allocative efficiency. Wendy's assertion cannot be correct.
D) Wendy is asserting that productive efficiency is realized in hamburger production, but not allocative efficiency. Wendy's assertion may be correct.
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A) create a market for pollution rights.
B) charge polluters an emission fee.
C) are an example of a direct control.
D) use private bargaining to establish the optimal quantity of emissions.
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A
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A) The supply curve reflects the marginal cost and the demand curve reflects the marginal benefit of this public good.
B) The demand curve reflects the marginal cost and the supply curve reflects the marginal benefit of this public good.
C) There will be an overallocation of resources at output level Q1.
D) There will be an underallocation of resources at output level Q3.
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A) Government agencies can make a great deal of money.
B) Pollution would be eliminated because nobody would want to pay for such a right.
C) The quality of water or air can be maintained at some acceptable standard through economic incentives.
D) The social consciousness of people would be raised as they obtain more appreciation for the importance of conservation.
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