When the selling price of a good goes up, what is the relationship to the quantity supplied?
a) the cost of production goes down
b) The profit made on each item goes down
c) It becomes practical to produce more goods
d) There is no relationship between the two
Answer: It becomes practical to produce more goods.
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In the figure above, the deadweight loss from the tariff is ________
A) $32 million B) $80 million C) $16 million D) zero
A tax is sometimes used by government to correct the problems associated with
A) negative externalities. B) positive externalities. C) internal benefits. D) external benefits.
Which of the following is most likely to be overconsumed?
A. Free water B. Tap water C. Sparkling water D. Bottled water
Which of the following would increase U.S. GDP?
a. Ford Motor Company begins to produce and sell cars in China.
b. Mercedes-Benz begins to produce and sell cars in Mississippi.
c. An American investor buys 100 shares of Ford stock.
d. An American investor purchases 100 shares of Mercedes-Benz stock.