When looking at this graph for the welfare effects of a subsidy, the cost to taxpayers ______.
a. prevents deadweight loss from the gains in consumer and producer surplus
b. is less than the gains in consumer and producer surplus
c. equals the gains in consumer and producer surplus
d. exceeds the gains in consumer and producer surplus
d. exceeds the gains in consumer and producer surplus
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Refer to Figure 10.7. A movement from point A to point B could be caused by
A) a negative demand shock. B) a decrease in the term premium investors expect in the future. C) an increase in the default-risk premium. D) an increase in the expected rate of inflation.
The network effect in the TV broadcasting industry results in
A) a positive market feedback between the number of advertisers and the size of TV audience. B) a negative market feedback between the number of advertisers and the size of TV audience. C) a positive market feedback between the number of advertisers and the number of TV channels. D) a negative market feedback between the number of advertisers and the number of TV channels.
The assumption that individuals act rationally implies that
a. people think only of themselves and disregard the well-being of others b. people undertake all those activities that yield benefits to themselves c. people only consider the costs of an activity to decide whether it is worthwhile d. the greater the cost of a charitable deed to a benefactor, the more likely he or she is to perform that deed e. people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile
A goldsmith has 100 gold coins in his safe and 100 receipts circulating. What is his reserve ratio?
What will be an ideal response?