Use the figure below to answer the following question.
What area represents deadweight loss after the government imposes the excise tax on the market?
A. triangle abc
B. square $13ac$9
C. triangle $21a$13
D. triangle $1c$9
Answer: A
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Suppose $100 invested next year results in a return of b two years from now. If individuals do not discount the future but have a beta of 0.5 (in the beta-delta model), for what range of b will an individual plan to make the investment but then reverse course next year?
What will be an ideal response?
In a Bertrand model, graphically, the intersection of all firms' best-response curves determines
A) the Nash equilibrium prices. B) the dominant strategy for each firm. C) the degree of product differentiation. D) the price of the market leader.
The downward slope of the demand for money curve reflects the fact that
A) people hold more of their wealth in the form of money as the price level rises. B) people hold more of their wealth in the form of money as the price level falls. C) people hold more of their wealth in the form of money as the interest rate rises. D) people hold more of their wealth in the form of money as the interest rate falls.
At a firm’s profit-maximizing level of output, its price is $200 and its short-run average total cost is $225. The firm
A. has a profit of $25 per unit of output. B. should shut down if its short-run average fixed cost is less than $25. C. has a loss of $100 per unit of output. D. should shut down if its short-run average variable cost exceeds $25.