The supply curve for whiskey is the typical upward-sloping straight line, and the demand curve for whiskey is the typical downward-sloping straight line. When whiskey is taxed, the area on the relevant supply-and-demand graph that represents
a. government's tax revenue is a rectangle.
b. the deadweight loss of the tax is a triangle.
c. the loss of consumer surplus caused by the tax is neither a rectangle nor a triangle.
d. All of the above are correct.
d
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A decrease in the discount rate
A) reduces the cost of borrowing from the Fed. B) increases the cost of reserves borrowed from the Fed. C) signals the Fed's desire to decrease the money supply. D) signals the Fed's desire to reduce lending to commercial banks.
Libertarians believe that in considering economic fairness, one should primarily consider the
a. outcome of the system. b. process by which outcomes arise. c. maximin criterion. d. maximization total social utility.
Which of the following is a positive economic statement?
A) We should raise the minimum wage in order to provide a decent wage for more people. B) Consumers bought fewer cars when the relative price of cars increased. C) The budget deficit has been rising in recent years. D) Federal government spending ought to be curtailed. E) b and c
In the definition of a market, economists consider:
A. actions by third parties that do not include buyers or sellers in the market. B. both actual and potential interactions between buyers and sellers. C. neither actual nor potential interactions between buyers and sellers. D. only actual interactions between buyers and sellers, not potential interactions.