In the above figure, the total dollar amount of the Medicare subsidies provided by the government is equal to
A) the difference between Ps and P0 multiplied by QM.
B) the difference between Ps and Pd multiplied by QM.
C) the difference between P0 and Pd multiplied by Qd.
D) the difference between Ps and Pd multiplied by Q0.
B
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With flexible exchange rates, central banks do not have to finance deficits because BOP equilibrium is restored by changes in exchange rates
Indicate whether the statement is true or false
The government might increase its spending to end a recession because:
A. allowing the short-run aggregate supply to adjust since back to the long-run can take a long time. B. the economy experiences lower prices at the long-run equilibrium. C. the economy enjoys a higher level of output in the long run. D. None of these justify why the government might change its spending to end a recession.
The law of diminishing marginal returns states:
a) As a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the marginal product of the variable factor eventually diminishes. b) As a firm uses more of a variable factor or production, total product eventually decreases. c) As the size of a firm?s plant increases, average cost eventually decreases. d) As the size of a plant increases, marginal product eventually decreases. e) As a firm uses more of a variable factor of production, its average cost eventually decreases.
Suppose you are choosing between milk and cookies. If the opportunity cost of cookies in terms of milk increases, then the budget curve will
A. shift outward. B. rotate outward. C. rotate inward. D. shift inward.