The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $500 per apartment, the deadweight loss will be
A) $1,000,000.
B) $500,000.
C) $250,000.
D) $125,000.
C
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Legislators are not likely to substitute money transfers to low-income people for in-kind benefits (e.g., food stamps, health care) because
A) low-income people generally do not know how to manage money effectively. B) low-income people prefer in-kind transfers. C) special interest groups benefit from the system of in-kind transfers. D) giving cash to the poor would necessitate a tax increase.
"Every point on a budget line has an indifference curve passing through it." Explain whether the previous statement is correct or not
What will be an ideal response?
The short-run aggregate supply curve is most likely to shift down (to the right) when actual output is:
A. not equal to potential output, regardless of whether it is above or below. B. less than potential output. C. equal to potential output. D. greater than potential output.
Marginal analysis refers to the
A. comparison of benefits and costs of choosing a little more or a little less of a good. B. calculation of opportunity costs of an economic activity. C. study of trade relations based on absolute cost differences. D. relationship between the cause and effect of an economic event.