In a private closed economy, the two components of aggregate expenditures are:
A. Consumption and government spending
B. Consumption and net exports
C. Consumption, investment, and net exports
D. Consumption and investment
D. Consumption and investment
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The air route from Dallas to Mexico City is served by more than one airline. The demand for tickets from American Airlines for that route is probably
A) inelastic but more elastic than the demand for all tickets for that route. B) elastic and more elastic than the demand for all tickets for that route. C) inelastic and less elastic than the demand for all tickets for that route. D) elastic but less elastic than the demand for all tickets for that route.
When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to raise the equilibrium price in this market and, therefore, decrease efficiency. This would have a tendency to
A) decrease producer surplus and decrease deadweight loss. B) decrease consumer surplus and increase deadweight loss. C) maximize consumer surplus and minimize producer surplus. D) increase consumer surplus and increase producer surplus.
Approaching a business cycle peak, actual real GDP ________ natural real GDP, which causes inflation to ________
A) exceeds, remain constant B) exceeds, accelerate C) is less than, decelerate D) equals, accelerate E) equals, remain constant
Return to the market for cigarettes from the previous questions. Suppose the government implements the tax you found in the previous question. But suppose the government is making a mistake. The true demand curve is in fact , and this is not a result of any behavioral bias. Compute the deadweight loss of the government's tax policy
a. DWL = 0. b. DWL = 500. c. DWL = 1,000 d. DWL = 2,500.