Perfect price discrimination
A. would maximize consumer surplus.
B. would eliminate consumer surplus.
C. would have only a small effect on consumer surplus.
D. would have no effect on consumer surplus.
B. would eliminate consumer surplus.
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Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and Congress and the president lower taxes to move the economy back to long-run equilibrium. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) A to B. B) C to B. C) A to E. D) B to A. E) B to C.
What is the effect of important restrictions on prices?
a) they cause prices to drop b) they cause prices to rise c) they often cause prices to rise steeply and then drop d) they usually do not have any lasting effect on price
Economic growth is shown by
A) a point near the top of the production possibilities curve. B) a point outside the production possibilities curve. C) an inward shift of the production possibilities curve. D) an outward shift of the production possibilities curve.
Deadweight loss refers to
A) losses in consumer surplus associated with excess government regulations. B) situations where market prices fail to capture all of the costs and benefits of a policy. C) net losses in total surplus. D) losses due to the policies of labor unions.