Senator Blacklung represents a state that grows a significant amount of tobacco. Not only do many of his constituents work for businesses in this industry, but the tobacco firms also make generous contributions to his reelection campaign. According to public choice theory, which of the following bills would Senator Blacklung be most likely to support?
a. a bill proposing an increase in the tax on cigarettes to fund urban renewal programs across the nation
b. a bill that would provide substantial subsidies for tobacco growers
c. a bill proposing increased funding for a national antismoking awareness campaign financed by an increase in the tax on cigarettes
d. a bill that would prohibit senators from accepting campaign contributions from firms who are involved in the production or sale of tobacco products
B
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The above figure shows the market for rice in Japan. S represents the domestic supply curve, and the horizontal line at P =1 represents the world supply curve. If imported rice is banned, the loss in social welfare is
A) a + b + c + d + e. B) a. C) c + e. D) i.
Regulators often raise prices instead of lowering them. This is designed to
a. prevent the exit of competitors. b. protect the consumer from cheap products. c. ensure high-quality products. d. ensure workers are adequately paid.
A perfectly competitive firm in the long run:
A. can earn positive or negative economic profits. B. makes zero economic profits. C. makes zero accounting profits. D. can earn negative accounting profits as long as economic profits are positive.
Contractionary monetary policy _____ consumption and _____ investment spending.
a) increases; increases b) decreases; increases c) increases; decreases d) decreases; decreases