Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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We say that individuals get a "warm glow" from giving to a public good if they not only get utility from the public good but also from giving itself. Explain the following: "While warm glow lessens the free rider problem, it cannot eliminate it."
What will be an ideal response?
Which countries demonstrate the theory of convergence with their closing of the gap with world leaders?
a. Hong Kong b. Singapore c. South Korea d. All of the above
Frederic Bastiat's Petition of the Candlemakers most directly refutes which of the following arguments for protectionism?
A. Increased domestic employment argument. B. Infant industry argument. C. Cheap foreign labor argument. D. Diversification-for-stability argument.
A monopolist faces a market demand curve with a constant elasticity of -2. The monopoly's production function is Q = 4L and its output price is given by p. What is the monopoly's marginal revenue product of labor function?
A) MRPL = 2p B) MRPL = 4p C) MRPL = 10 - 2p D) MRPL = 5 + 3.5p