Elvis values the first gravy sandwich at $5, the second at $4.50, the third at $4 . If he buys three for $4 each, his consumer surplus is
a. $5
b. $4
c. $1.50
d. $9.50
e. $12
C
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If the price level increases, there is ________ the AD curve and the quantity of real GDP demanded ________
A) a movement upward along; increases B) a leftward shift in; decreases C) a movement downward along; increases D) no change in; does not change E) a movement upward along; decreases
Monopolistic competition is judged to be economically inefficient because
A) the price is greater than marginal cost. B) firms earn zero economic profit in the long run. C) marginal revenue equals marginal cost. D) firms have deficient capacity in the long run. E) firms earn an economic profit in the long run.
If a citizen decides he has had enough of big government and launches a personal campaign to expose big spenders in Congress,
a. he is likely to have his taxes reduced dramatically b. his taxes are not likely to fall very much c. he will be thrown in jail d. he is likely to get elected by other voters e. he will get the support of many special-interest groups
Public choice theory suggests that politicians will be most likely to favor redistribution of income from
a. the rich to the poor. b. unorganized taxpayers to well-organized interest groups. c. well-organized business groups to consumers. d. none of the above.