Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is $3?
A) $600
B) $725
C) $1,000
D) $1,120
C
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Which of the following statements does not help to explain why government drug interdiction increases drug-related crime?
a. The demand for illegal drugs is inelastic. b. Interdiction results in drug addicts having a greater need for quick cash. c. Interdiction results in an increase in the amount of money needed to buy the same amount of drugs. d. Government drug programs are more lenient now with drug offenders than they were in the 1980s.
Suppose the economy starts off producing Natural Real GDP. Next, aggregate supply rises, ceteris paribus. As a result, the price level falls in the short run. In the long run, when the economy has moved back to producing Natural Real GDP, the price level will be
A) higher than it was in short-run equilibrium. B) lower than it was in short-run equilibrium but higher than it was originally (before aggregate supply rose). C) lower than it was originally (before aggregate supply rose). D) equal to what it was originally (before aggregate supply rose).
Social welfare functions can be formed in many ways. They can be additive, meaning that the all utilities curves are added together. They incorporate the idea of least-best, meaning that the utility of the person with the least is maximized. If you were a central planner for an economy, what type of social welfare function would you create?
What will be an ideal response?
Which of the following would NOT shift the consumption function?
What will be an ideal response?