When looking at this graph for the welfare effects of a subsidy, what does the location of the deadweight loss tell us?
a. It is caused by reducing the price producers receive.
b. It is caused by overproduction.
c. It is caused by underproduction.
d. It is caused by increasing the price consumers pay.
b. It is caused by overproduction.
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The nominal exchange rate is 90 Pakistani rupees per dollar. The price of a shirt in Pakistan is 1800 rupees. The same shirt sells for $25 in the U.S. A. What is the real exchange rate? Show your work. B. Can arbitragers make a profit? C. If your answer to C is yes, where would they buy and where would they sell?
The Keynesian consumption function is in an economy C = 10 + 0.8 Yd. When disposable income is €1000, what is total consumption?
(a) 0.8 (b) 800 (c) 810 (d) 0.81
If a firm faces an upsloping labor supply curve (and there is no union or minimum wage), its:
A. MRC curve is also upsloping. B. MRC curve is perfectly elastic. C. MRP curve is perfectly inelastic. D. MRP curve is also upsloping.
Refer to Figure 5-3. At the competitive market equilibrium, for the last unit produced
A) the size of the external cost is Pn - Po. B) the size of the external cost is Pm - Po. C) the size of the external benefit is Pn - Po. D) the size of the external benefit is Pm - Po.