Refer to Figure 4-9. What area represents the deadweight loss after the imposition of the price floor?
A) F + G B) C + D + F + G C) C + D D) C + D + G
C
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Refer to the figure above. The MSB curve lies to the right of the demand curve because the production of Good Y involves ________
A) positive externalities B) negative externalities C) increasing returns to scale D) decreasing returns to scale
Externalities affect only the buyer and seller involved in an exchange.
Answer the following statement true (T) or false (F)
If you overhear a group of people talking about their plans to save for their retirement and one of them says that it causes them to save less because, as they reason it, "the government is saving for me," you would attribute this to the
A. asset substitution effect. B. induced retirement effect. C. slovenly effect. D. bequest effect.
A bank can safely lend only an amount equal to its excess reserves because
A) all of its reserves are now required reserves. B) borrowers will spend the proceeds of their loans, and the bank will lose all of its excess reserves. C) the excess reserves will fall to zero when the bank makes the loans. D) This is not true since a bank can safely lend an amount equal to its total reserves.