The above figure shows supply and demand curves for milk. Suppose that the government passes a $2 per gallon subsidy. The deadweight loss resulting from this policy will be
A) j.
B) f + g.
C) b + c + f + g.
D) c + g.
A
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Which of the following statements is true?
A) Under monopoly, the seller sets the price of its good below marginal costs. B) Under perfect competition, sellers set the price of their goods below marginal costs. C) Under monopoly, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs. D) Under perfect competition, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs.
Which of the following schools of thought criticized the Fed's policy of targeting interest rates?
a. The new Keynesians b. The Keynesians c. The monetarists d. The classical economists e. The new classical economists
Suppose that Abdul opens a coffee shop. He receives a loan from a bank for $100,000 . He withdraws $50,000 from his personal savings account. The interest rate on the loan is 8%, and the interest rate on his savings account is 2%. Abdul's annual implicit cost of capital is
a. $8,000. b. $4,000. c. $2,000. d. $1,000.
If the RECAP policy was imposed on firms by the government, it would be considered a(n):
A. purposeful behavior. B. advantageous default option nudge. C. shadow price. D. push.