Podcast
Questions and Answers
In a perfectly competitive market with no externalities and increasing costs, why do economists typically not advocate for price and quantity controls?
In a perfectly competitive market with no externalities and increasing costs, why do economists typically not advocate for price and quantity controls?
- To increase market instability
- To encourage law breaking
- To send the wrong price signals to producers and consumers
- To prevent losses in welfare (correct)
What is the purpose of severance taxes when applied at the production level?
What is the purpose of severance taxes when applied at the production level?
- To encourage law breaking
- To tax the resource at the production stage (correct)
- To decrease market instability
- To create a sustainable market
What type of taxes are more often used as ad valorem taxes in the context of energy production?
What type of taxes are more often used as ad valorem taxes in the context of energy production?
- Income taxes
- Tariffs
- Severance taxes (correct)
- Excise taxes
When energy is traded across borders, what type of tax is commonly applied?
When energy is traded across borders, what type of tax is commonly applied?
In the competitive model provided, what is the equilibrium quantity when the price is set at 4.2?
In the competitive model provided, what is the equilibrium quantity when the price is set at 4.2?
What happens to quantity demanded when a unit tax of three is imposed on a product in a competitive market?
What happens to quantity demanded when a unit tax of three is imposed on a product in a competitive market?
How does demand price change with a unit tax?
How does demand price change with a unit tax?
What is the purpose of adding three to the supply price when considering a unit tax?
What is the purpose of adding three to the supply price when considering a unit tax?
In a perfectly competitive market, what occurs when supply equals demand?
In a perfectly competitive market, what occurs when supply equals demand?
What does the inverse function Qs= -3+3Ps represent in a competitive market model?
What does the inverse function Qs= -3+3Ps represent in a competitive market model?
