Use the figure below to answer the following question.
If actual production and consumption occur at Q1 and the price is P2, deadweight loss equals area
A. f.
B. b.
C. d.
D. b + d.
Answer: C
You might also like to view...
Assume that the following are the predicted inflation rates in these countries for the year: 2% for the United States, 3% for Canada; 4% for Mexico, and 5% for Brazil
According to the purchasing power parity and everything else held constant, which of the following would we expect to happen? A) The Brazilian real will depreciate against the U.S. dollar. B) The Mexican peso will depreciate against the Brazilian real. C) The Canadian dollar will depreciate against the Mexican peso. D) The U.S. dollar will depreciate against the Canadian dollar.
In Figure 3-7 above, the multiplier effect does NOT explain
A) the increase in equilibrium income. B) the increase in induced saving. C) the increase in AP. D) all of the above.
Moving Water Around The San Diablo dam has electricity generating turbines on a chute that connects lower and upper reservoirs. During the day, water is drained from the upper reservoir to the lower to produce electricity. But at night, electricity is used to pump the water back up to the upper reservoir. Since the water is just going back and forth, how can wealth be generated?
To fully understand how taxes affect economic well-being, we must compare the
a. benefit to buyers with the loss to sellers. b. price paid by buyers to the price received by sellers. c. profits earned by firms to the losses incurred by consumers. d. decrease in total surplus to the increase in revenue raised by the government.