Any policy change that results in a Pareto-superior allocation
A) will increase welfare under certain conditions.
B) must increase welfare.
C) will leave welfare unchanged.
D) will have an unpredictable effect on welfare.
B
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Interlace, Inc produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. When Interlace maximizes its profit, the deadweight loss is
A) zero. B) $15,000. C) $21,000. D) $3,000.
If an aluminum manufacturer does not bear the entire cost of the smoke it emits, it will
a. emit a lower level of smoke than is socially efficient. b. emit a higher level of smoke than is socially efficient. c. emit an acceptable level of smoke. d. not emit any smoke in an attempt to avoid paying the entire cost.
A firm using Baumol's model will do one of the following if the interest rate on short-term securities went up.
A) increase the collection period B) decrease the average cash balance C) increase the average cash balance D) decrease the collection period
Which is the best summary of this graph?
a. An increase in demand eventually leads to higher equilibrium price and quantity.
b. An increase in demand leads to a shift in the supply curve.
c. A higher equilibrium price and quantity leads to an increase in the quantity supplied.
d. An increase in demand eventually leads to lower equilibrium price and quantity.