Subsidies are most likely to:
A. leave total economic surplus unchanged, but transfer surplus from producers to consumers.
B. reduce total economic surplus.
C. increase total economic surplus.
D. reduce consumer surplus.
Answer: B
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It is possible for the government to remove individuals from a prisoner's dilemma setting and make them better off.
Answer the following statement true (T) or false (F)
Credit unions made it through the 1980s in relatively good shape because
A) most of their depositors were individuals. B) most of their depositors were businesses. C) they held many mortgages among their assets. D) they held no mortgages among their assets.
The loss of capital due to the wearing out of machines is known as ________
A) saving B) investment C) consumption D) depreciation
A monopolistically competitive firm is currently earning a positive economic profit. If other firms enter the market, we would expect that the added competition will cause this firm to adjust its output such that it
a. will operate closer to its efficient scale. b. will operate further from its efficient scale. c. will no longer be at its efficient scale. d. might move either closer to or further from its efficient scale.