The figure above shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced. If there are no external costs and no external benefits, the quantity of milk sold is
A) greater than the efficient level of output.
B) less than the efficient level of output.
C) 100 million gallons greater than the efficient level of output.
D) the efficient level of output.
A
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The sorting and separation of people by various characteristics, including race, ethnicity, religion, and gender is called
A) affirmative action. B) discrimination. C) segregation. D) demographic manipulation.
Taxes are one method of funding the poverty alleviation programs by the government. Which of the following is an important impact of taxes?
a. Taxes increase workers' incentives to work for longer hours. b. Taxes raise the disposable income of the workers. c. Imposition of taxes makes the government popular among the people. d. Taxes reduce the opportunity cost of leisure. e. Taxes reduce the demand for labor.
When the government uses a command-and-control policy to solve an externality, it
a. is usually the most effective policy option available. b. creates policies that directly regulate behavior. c. usually involves taxing the consumption of a commodity. d. typically refers to the Coase theorem to structure the policy.
The Lucas supply function, in combination with the assumption that expectations are rational, implies that an announced monetary policy change will lead to
A. a negative price surprise. B. a positive price surprise. C. a positive price surprise for expansionary monetary policy and a negative price surprise for contractionary monetary policy. D. no price surprise.