Which of the following is true?
a. Once the equilibrium price and output is reached, all the mutually beneficial trade opportunities between suppliers and demanders will have taken place, and the sum of consumer and producer surplus is maximized.
b. The deadweight loss of a tax is the difference between the lost consumer and producer surplus and the tax revenue generated.
c. Those goods that are heavily taxed often have a relatively inelastic demand curve in the short run, so that the burden falls mainly on the buyer, and the deadweight loss to society is smaller than if the demand curve was more elastic.
d. All of the above are true.
d
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The figure above shows the demand and supply of dollars in the foreign exchange market. At a price of 1.20 Brazilian reals per dollar
A) there will be a shortage of dollars. B) $120 billion dollars will be supplied. C) $40 billion dollars will be demanded. D) there will be a surplus of dollars.
An efficiency wage premium serves the same function as a bond because, just as with a bond, the premium represents
A) the amount the employee loses if caught shirking. B) the expected value of the amount the employee loses if he shirks. C) the cost of monitoring the employee. D) the gain to the employee if he shirks.
An important effect of fractional reserve banking is that: a. bankers' choices about how much to lend can affect the money supply
b. the commercial banking system has complete control over total reserves. c. bankers always turn every dollar of excess reserves into loans. d. a new bank deposit allows a bank to extend loans of the same amount to borrowers.
Organizations must be prepared respond to negative publicity.
a. true b. false