A government subsidy paid to a firm i. increases the demand for the good. ii. has no effect on the supply of the good. iii. leads to an increase in the equilibrium quantity
A) i only
B) i and ii
C) ii only
D) iii only
E) i and iii
D
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In a 2-good model, if individuals in a group all have tastes that are quasilinear in good 1, then we can treat the group as if it was a single representative consumer.
Answer the following statement true (T) or false (F)
Explain the relationship between the real interest rate and the demand for loanable funds. Compare that relationship to the relationship between expected profit and the demand for loanable funds
What will be an ideal response?
Classical economists believed that:
a. price flexibility automatically directs market economies to full employment. b. budget deficits and surpluses were necessary for the control of economic fluctuations. c. market economies suffer prolonged periods of recessions and depressions. d. market economies are inherently unstable because of fluctuating aggregate demand.
What factors must countries with different income levels and political preferences balance when determining the allocative efficiency of environmental regulations?
a. Economic output versus environmental protection b. Marginal costs versus productive efficiency c. Productive efficiency versus unproductive inefficiency d. The value of the past versus the value of the present