10 Questions
What potential problem arises from implementing taxes on negative externalities, such as tobacco tax?
Tax evasion
What could be a consequence of a surplus in supply causing a fall in price for entrepreneurs?
Lower revenue
Why might policies to reduce consumption of over-consumed resources prove politically unpopular?
Resistance from industries reliant on over-consumption
What does the price mechanism fail to take into account in relation to environmental issues?
Future costs
What potential problem could arise from implementing taxes on negative externalities, such as tobacco tax?
Tax evasion may occur, undermining the effectiveness of the tax
Why might volatile markets cause swings in economic fortunes?
Impact on investment confidence
What does the price mechanism fail to take into account in relation to environmental issues?
Future costs of over-consumption
Why might policies to reduce consumption of over-consumed resources prove politically unpopular?
They may impose restrictions on individual freedom and choice
Why might volatile markets cause swings in economic fortunes?
They can lead to unpredictable changes in revenue for entrepreneurs
What could be a consequence of a surplus in supply causing a fall in price for entrepreneurs?
Lower revenue for entrepreneurs
Test your knowledge of economic issues at the micro level with this quiz. Explore topics such as externalities and their impact on entrepreneurs, the need for government intervention, and the implications of utility maximization. Sharpen your understanding of these critical economic concepts.
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