The main problem with price subsidies is that they:
A. lead to a decrease in demand.
B. lower total economic surplus.
C. do not help the poor afford essential goods and services.
D. are not effective at lowering prices.
Answer: B
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The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase.CPUGHzTotal BenefitMarginal BenefitTotal CostsMarginal Costs2.0$1,000 $900 2.5$1,400 &1003.0 $300$1,200 3.5$1,900 &1,500 4.0$2,000 &400The marginal benefit of upgrading from a 2.0GHz computer to a 2.5GHz computer is:
A. $400. B. $1,400. C. $1,000. D. $100.
If a firm can increase its sales only by lowering its price, then
A) the firm is a price searcher. B) the firm's marginal revenue will be less than price. C) the demand curve for the firm's product is negatively sloped. D) all of the above are true.
If the Fed purchases securities worth $10 million from a commercial bank, the banking system's balance sheet will show
A) an increase in securities held of $10 million and an increase in bank reserves of $10 million. B) an increase in securities held of $10 million and a decrease in bank reserves of $10 million. C) a decrease in securities held of $10 million and an increase in bank reserves of $10 million. D) a decrease in securities held of $10 million and a decrease in bank reserves of $10 million.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, an increase in unemployment may be represented by the movement from
A. B to A. B. A to C. C. C to D. D. B to D.