Suppose a victim of an accident brings the injurer to court. You are hired to determine the amount of damages
You are specifically asked to find a measure of the amount of money needed to restore the victim to the position he was in prior to the accident. What welfare measure will provide the most accurate measure of this amount? A) compensating variation
B) equivalent variation
C) consumer surplus
D) the loss of utility
A
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Property rights motivate people to work harder and produce more economic pie than they would if property rights were not well defined
Indicate whether the statement is true or false
The LM curve will be vertical and fiscal policy ineffective when
A) the demand for money is unaffected by changes in the interest rate. B) the demand for money is unaffected by changes in income. C) investment is unaffected by changes in the interest rate. D) investment is unaffected by changes in income.
Farm programs that guarantee a price higher than equilibrium
a. cause shortages b. decrease government spending c. decrease taxes d. raise farm property values e. increase suburban development
Economies of scale exist when:
A. input prices are falling. B. the average cost of production falls as output rises. C. doubling all the inputs leads to less than double the output. D. firms become larger.