Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and favorable weather has increased the grape harvest of California vineyards
In the market for red wine, these two developments would
A) increase demand and increase supply, resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of red wine.
B) increase demand and increase supply, resulting in an increase in the equilibrium price and an uncertain effect on the equilibrium quantity of red wine.
C) increase demand and decrease supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of red wine.
D) increase demand and increase supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of red wine.
A
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Refer to the figure above. The quota restricts trade by the same amount as a tariff of
A) $20. B) $30. C) $50. D) Cannot answer without more information.
The cost to a firm of producing one more unit of output
A) usually exceeds the firm's price. B) is significantly less than the firm's price for purely competitive firms operating in long-run equilibrium. C) usually equals the firm's price for monopolistically competitive firms. D) is the firm's marginal cost.
The optimal level of pollution occurs where the marginal social benefit is equal to
a. marginal private cost, which equals marginal social cost plus marginal external cost b. marginal social cost, which equals marginal private cost plus marginal external cost c. marginal external cost, which equals marginal private cost plus marginal social cost d. marginal private cost, which equals marginal social cost plus marginal internal cost e. marginal social cost, which equals marginal private cost plus marginal internal cost
Which of these is a supply-side approach to increase growth?
a. Spending on the construction and repair of state highways b. Providing tax benefits to start-up companies c. Investing in the production of arms and ammunitions d. Replacing old aircrafts with new fighter planes e. Increasing transfer payments to retirees