Why are harder forms of liquor produced in "dry" counties in the U.S.?
A) Drinkers in dry counties only prefer liquor to beer and wine.
B) Producers only prefer to drink liquor.
C) Producers find liquor more efficient to produce, given the rules of the game.
D) Trick question: No liquor is produced in "dry" counties.
C
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At a competitive equilibrium with no externalities, taxes, subsidies, public goods, common resources, or high transactions costs, which of the following occurs?
i. an efficient outcome ii. definitely a fair outcome when judged by the fair-results approach iii. marginal cost equals marginal benefit iv. producer surplus equals consumer surplus A) i and iii B) i, ii and iii C) ii and iii D) i, ii, iii and iv E) only i
A movie monopolist sells to students and adults. The demand function for students is QdS = 600 - 100P and the demand function for adults is QdA = 1,200 - 100P. The marginal cost is $2 per ticket. Suppose the movie theater can price discriminate. What is the monopolist's profit from students?
A. $400 B. $2400 C. $2500 D. $0
Refer to the above figure. A price support set at P3 will
A) lead to a surplus of Q3 minus Q1. B) lead to a shortage of Q3 minus Q1. C) lead to an equilibrium quantity of Q2. D) be ineffective.
An increase in the marginal propensity to consume (MPC) leads to an increase in the spending multiplier
a. True b. False Indicate whether the statement is true or false