This topic contains a solution. Click here to go to the answer

Author Question: How do taxes work to reduce a negative externality? Explain in detail. What will be an ideal ... (Read 78 times)

lunatika

  • Hero Member
  • *****
  • Posts: 548
How do taxes work to reduce a negative externality? Explain in detail.
 
  What will be an ideal response?

Question 2

Find an example of the distinction between microeconomics and macroeconomics in today's headlines.
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

dajones82

  • Sr. Member
  • ****
  • Posts: 359
Answer to Question 1

If a per-unit tax exactly equal to marginal damage costs is imposed on a firm, the firm will weigh the tax, and thus the damage costs, in its decisions. At the new equilibrium price consumers will be paying an amount sufficient to cover full resource costs as well as the cost of damage imposed. The efficient level of output for the firm will also fall as well.

Answer to Question 2

Microeconomics: On May 6, 2014 a headline in The New York Times was Bayer Buys Merck's Consumer Business for 14.2 Billion. This story covers a microeconomic topic because it discusses how two pharmaceutical firms have decided to transfer ownership of the unit producing over-the-counter consumer products for Merck. Macroeconomics: On May 6, 2014, a headline in The Wall Street Journal was U.S. Trade Gap Narrows as Demand Grows Here and Abroad. This story covers a macroeconomic topic because it concerns the total amount of international trade in the entire economy.




lunatika

  • Member
  • Posts: 548
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)


cdmart10

  • Member
  • Posts: 332
Reply 3 on: Yesterday
Wow, this really help

 

Did you know?

In most climates, 8 to 10 glasses of water per day is recommended for adults. The best indicator for adequate fluid intake is frequent, clear urination.

Did you know?

Historic treatments for rheumatoid arthritis have included gold salts, acupuncture, a diet consisting of apples or rhubarb, nutmeg, nettles, bee venom, bracelets made of copper, prayer, rest, tooth extractions, fasting, honey, vitamins, insulin, snow collected on Christmas, magnets, and electric convulsion therapy.

Did you know?

Bacteria have been found alive in a lake buried one half mile under ice in Antarctica.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

For a complete list of videos, visit our video library