Since rent control outlaws transactions that would make both the consumer and supplier better off, then rent control:
A. causes excess demand and increases total surplus.
B. causes inefficiency.
C. decreases total surplus.
D. Both causes inefficiency and decreases total surplus are correct.
Answer: D
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Which of the following is a necessary condition for government subsidies to influence a firm to choose an output level as if it were a Stackelberg leader?
A) The subsidy must be announced before the firms choose output levels. B) The subsidy must be equal to the firm's marginal cost. C) The subsidy must be equal to the firm's rival's marginal cost. D) The firm does not have any fixed costs.
The U.N.'s Millennium Poverty Goal is to
A. Keep the number of people in poverty at a constant level. B. Cut the percentage of people in extreme poverty in half worldwide. C. Reduce the percentage of people in severe poverty in the poorest nations. D. Cut the absolute number of people in extreme poverty in half worldwide.
Exhibit 8-11 A firm's cost and marginal revenue curves
In Exhibit 8-11, when the price is $5, the firm:
A. is making an economic profit of $21. B. should produce output equal to 10. C. is breaking even. D. should produce output equal to 7.
The civilian labor force includes
A) The number of people in the Armed Services. B) The number of employed persons. C) The number of employed and unemployed persons in the economy. D) None of the above.