A subsidy in an industry would result in:
a. an increase in consumer surplus.
b. an increase in producer surplus
c. both (a) and (b)
d. none of the above.
c
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Given that all countries have the same Cobb-Douglas production function, i.e. Y/N = (K/N)b, where b = 0.5, then a ten-fold difference in per capita income requires a difference in capital per capita by a factor of
A) 10. B) 100. C) 1000. D) 10,000.
According to the Keynesian view, the focus of stabilization policies
a. is to keep the economy at its equilibrium level in the face of shocks to aggregate demand. b. should be to keep the economy at its equilibrium level in the face of shocks to aggregate supply. c. is on the short run. d. All of the above
An example of a cooperative game would be
A) oligopoly. B) monopolistic competition. C) a cartel. D) perfect competition.
Use the above figure. When the price increases from $2 to $10, total revenue
A. increases from areas B + C to areas A + D and demand is elastic. B. increases from areas A + B to areas B + C and demand is inelastic. C. increases from areas B + C to areas A + B and demand is inelastic. D. increases from areas C + D to areas B + A and demand is elastic.