Under fair-returns price regulation:
A) deadweight loss is likely to be maximized.
B) deadweight loss is likely to be minimized.
C) firms are less likely to innovate because they earn zero profits.
D) firms are more likely to innovate because they earn positive profits.
C
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The time it takes for a policy to actually work is known as
A) inside lags. B) crowding out. C) fiscal policy. D) outside lags.
The theory of economic rent can be used to explain high incomes received by movie stars and athletes
a. True b. False Indicate whether the statement is true or false
A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded, P is the product price, and I is consumer income. To compute an appropriate value for c, we can use observed values for Q and I and then set the estimated income elasticity of demand equal to:
A. c(Q/I). B. -b(I/Q). C. Q/(cI). D. c(I/Q).
Answer the following statement true (T) or false (F)
1) Producing a good in the least costly way is known as allocative efficiency. 2) A market that achieves productive efficiency is producing the quantity of goods most desired by society. 3) A market that is achieving allocative efficiency must also be achieving productive efficiency. 4) A government tax per unit of output reduces supply.