If the government wants to encourage the consumption of a particular good, they should enact:
A. a subsidy to buyers, since they want to affect consumption of the good.
B. a subsidy to sellers, since they want more to be produced and offered for sale.
C. a subsidy to buyers, since they deserve the benefit more than the producers.
D. a subsidy on either buyers or sellers, since they will both have the same effect on the market.
D. a subsidy on either buyers or sellers, since they will both have the same effect on the market.
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Suppose all firms in an industry are identical. In the long run, entry and exit guarantee that all firms will have zero
a. marginal cost. b. average cost. c. economic profit. d. accounting profit.
Two nations can produce computers and software in the amounts given in the table above
Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.
Why is the use of theory and observation more difficult in economics than in sciences such as physics?
a) It is difficult to evaluate an economic experiment. b) It is difficult to devise an economic experiment. c) It is difficult to actually perform an experiment in an economic system. d) It is difficult to collect sufficient data.
If the demand function for city bus rides is P = 100 - 10Q and the present price of a ride is 50, then
A. raising prices will increase city revenue. B. raising prices will decrease city revenue. C. from the information given it is not clear what would happen to city revenue if price is increased. D. raising prices will not change city revenue.