The sum of consumer surplus and producer surplus is equal to
A) the deadweight loss.
B) the economic surplus.
C) zero.
D) total profit.
Answer: B
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Government-imposed quantity restrictions
A. generate a higher price for the good than would prevail under freely competitive markets. B. can cause prices to either be higher or lower, but always cause excess quantities supplied to develop. C. does not affect the price of the good because quantity restrictions always ban sale of the good completely. D. generate a lower price for the good than would prevail under freely competitive markets.
Can macroeconomic policy be used systematically to create unanticipated inflation?
A) No, according to Keynesian economists. B) Yes, according to classical economists. C) No, according to classical economists. D) Yes, according to Keynesian economists, if Ricardian equivalence holds.
The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe
A) the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. B) the quantity demanded of both to fall. C) the demand for the new textbook to increase while the demand for the used textbook to decrease. D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.
Relating to the Economics in Practice on page 338: A number of companies are using their own internal carbon taxes to reflect the social cost of carbon emissions on the environment. The price per ton of carbon emissions that they are using
A. has been set by the government. B. is not standardized. C. is the price established by the EPA. D. has been agreed to by the private sector.