Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.Equilibrium in this market occurs at the intersection of curves S and D.
Figure 4.6Refer to Figure 4.6. The deadweight loss due to underproduction is area [C + F] if price is
A. P1.
B. P2.
C. P3.
D. > P3.
Answer: A
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In 1990 the United States imposed trade embargoes on Iraq's international trade. The negative effect on Iraq's consumer surplus would be greater the
A) less elastic Iraq's demand schedule. B) more elastic Iraq's demand schedule. C) greater Iraq's dependence on foreign products. D) more inelastic Iraq's supply schedule. E) less elastic Iraq's labor force is.
In the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to
________, everything else held constant. A) up; rise B) up; fall C) down; rise D) down; fall
The corporation, as a form of business organization, fueled the positive trend toward federal regulation of business activities for all of the following reasons except
(a) Corporations were rapidly becoming more numerous than sole proprietorships and partnerships. (b) Corporations made possible or encouraged growth in the number of giant enterprises. (c) Corporations were adept at market manipulations, including price-fixing. (d) Corporations were able to take advantage of economies of scale which made possible business organizations whose affairs overlapped local or state jurisdictions, creating the need for federal control across state lines.
The free rider problem suggests that a producer will tend to: i. produce more than the optimal quantity of a public good. ii. produce less than the optimal quantity of a public good. iii. produce the optimal quantity of a public good if it is funded out of tax revenue
a. (i) only b. (ii) only c. (i) and (iii) only d. (ii) and (iii) only