What is the welfare impact of a subsidy policy?
A) Producer surplus increases, consumer surplus declines, and total welfare declines.
B) Producer and consumer surplus increase, and these gains are larger than the government cost.
C) Producer and consumer surplus increase, and these gains are smaller than the government cost.
D) Producer surplus increases, consumer surplus declines, and total welfare increases due to the subsidy program.
C
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When goldsmiths issued receipts to gold owners, and those gold receipts circulated while gold stayed in the goldsmiths' safes,
A) the gold receipts were considered money because they were used as a means of payment. B) an infant banking system developed in sixteenth century Europe. C) fiat money was created. D) money was invented. E) Both A and B are correct.
The ease with which an asset can be converted into a medium of exchange is known as:
a. volatility. b. liquidity. c. currency. d. Gresham's Law. e. speculative exchange.
The "Lemon's" argument helps to explain why
A. physical depreciation is the only reason for the sharp price differential between new and used cars. B. physical depreciation is an insufficient reason for the sharp price differential between new and used cars. C. new and used cars sell for more than their intrinsic value would suggest. D. used cars fail to satisfy consumer demands for transportation.
Consider two oligopolistic industries selling the same product in different locations. In the first industry, firms always match price changes by any other firm in the industry. In the second industry, firms always ignore price changes by any other firm
Which of the following statements is true about these two industries, holding everything else constant? A) Market prices are likely to be higher in the first industry in which firms always match price changes by rival firms than in the second where firms ignore their rivals' price changes. B) Market prices are likely to be lower in the first industry where firms always match price changes by rival firms than in the second where firms ignore their rivals' price changes. C) Market prices are likely to be the same in both markets because they are both oligopolistic markets. D) No conclusions can be drawn about the pricing behavior under these very different firm behaviors.