Policies that restrict supply could generate an increase in social welfare because the increase in producer surplus could exceed the decrease in consumer surplus
Indicate whether the statement is true or false
False. One impact of a supply restriction is an exchange from consumers to producers. The net effect on social welfare is zero. Additionally, there is a deadweight loss. This is the additional surplus that could be generated if supply were not restricted. This effect is always negative. As a result, social welfare always declines in response to a supply restriction.
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Expansionary monetary policy ________
A) lowers tax rates B) increases interest rates C) increases tax rates D) lowers interest rates
When a business is owned and operated by a single individual who receives all of the profits and is responsible for all debts, it is known as a
A) partnership. B) conglomerate. C) corporation. D) proprietorship.
When President Harry Truman said that he wanted to find a one-armed economist because his economic advisors always said, "On the one hand... and on the other hand... " he recognized that the advice of economists is often open to more than one interpretation. Why is this? a. Economists cannot make up their minds on policy matters
b. Economists agree with each other on all policy issues. c. Economists are aware that tradeoffs are involved in most policy questions. d. Economists are often unable to identify the critical questions involved in policy issues.
The slope of a consumer's budget constraint is equal to: a. the consumer's income in the previous period divided by his income in the current period. b. the price of one good divided by the price of the other good
c. the ratio of the marginal utilities from two consecutive units consumed of a good. d. the price of one good divided by the present income of the consumer.