Refer to the information provided in Figure 13.11 below to answer the question(s) that follow.
Figure 13.11Refer to Figure 13.11. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. What is the value of the deadweight loss?
A. $0
B. $16,000
C. $32,000
D. Indeterminate from the given information.
Answer: A
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Deductibles, copayments, and coinsurance are all ways in which insurance companies can address the problem of moral hazard
Indicate whether the statement is true or false
Lizzie's budget line is shown in the figure above. If Lizzie's income increases, her budget line
A) shifts rightward and its slope does not change. B) shifts leftward and its slope does not change. C) becomes flatter. D) becomes steeper.
George's parents let him use the family car whenever he wants, but require that he pays for all gas he uses. George has been driving the car 100 miles per week
His parents want to limit how much he drives the family car, but don't want to impose a major burden on his finances. Mom's plan is to charge him a dollar for each ten miles he drives the car (per week), but to increase his allowance by $10. Dad thinks this plan will have no effect on his driving since he is going to get the money back at the end of the week. Who is right? Explain.
One of the central predictions of neo-classical macroeconomic growth theory is that an increase in the growth rate of the population causes at first a decline the growth rate of real output per capita,
but that subsequently the growth rate returns to its natural level, itself determined by the rate of technological innovation. The intuition is that, if the growth rate of the workforce increases, then more has to be saved to provide the new workers with physical capital. However, accumulating capital takes time, so that output per capita falls in the short run. Under the assumption that population growth is exogenous, a number of regressions of the growth rate of output per capita on current and lagged population growth were performed, as reported below. (A constant was included in the regressions but is not reported. HAC standard errors are in brackets. BIC is listed at the bottom of the table). Regression of Growth Rate of Real Per-Capita GDP on Lags of Population Growth, United States, 1825-2000 (1) (2) (3) (4) (5) Lag number Dynamic multipliers Dynamic multipliers Dynamic multipliers Dynamic multipliers Dynamic multipliers 0 -0.9 (1.3) -1.1 (1.3) -1.3 (1.7) -0.2 (1.7) -2.0 (1.5) 1 3.5 (1.6) 3.2 (1.6) 1.8 (1.6) 0.8 (1.5) - 2 -1.3 (1.7) -3.0 (1.6) -2.2 (1.4) - - 3 0.2 (1.7) 1.5 (1.2) - - - 4 -2.0 (1.5) - - - - BIC -234.4 -236.1 -238.5 -240.0 -241.8 (a) Which of these models is favored by the information criterion? (b) How consistent are these estimates with the theory? Is this a fair test of the theory? Why or why not? (c) Can you think of any improved data to test the theory? What will be an ideal response?