In the above figure, to achieve efficiency, the government should
A) impose a tax of $2 per unit.
B) impose a tax of $3 per unit.
C) offer a subsidy of $2 per unit.
D) offer a subsidy of $3 per unit.
C
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An open market purchase by the Fed
A) increases the total amount of reserves in the banking system. B) causes the reserve requirement to fall. C) does not change the total amount of reserves in the banking system. D) decreases the total amount of reserves in the banking system.
If a person supplies fewer hours of labor in response to a wage increase, then
A) the substitution effect is greater than the income effect. B) the income effect is greater than the substitution effect. C) the income effect equals the substitution effect. D) the person is not maximizing utility.
Suppose there is an increase in supply that reduces market price. Consumer surplus increases because (1) consumer surplus received by existing buyers increases and (2) new buyers enter the market
a. True b. False Indicate whether the statement is true or false
Suppose Smith wants one iPhone no matter what the price is between $0 and $350, Jones wants one iPhone no matter what the price is between $0 and $200, and Griffith wants one iPhone no matter what the price is between $0 and $450. In this case, each individual buyer's demand curve will be __________________ and the market demand curve will be __________________
A) downward sloping; vertical B) vertical; downward sloping C) vertical; vertical D) downward sloping; downward sloping