Consider the hypothetical supply and demand of Kidneys.
Initially, kidneys are exchanged by donations only (price=0). If the government decides to legalize kidney sales and the market reaches equilibrium, then:
A. consumer surplus remains the same.
B. total surplus increases.
C. a shortage of kidneys will arise.
D. producer surplus remains the same.
Answer: B
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Country risk analysis involves a consideration of only economic factors
Indicate whether the statement is true or false
Virtual currency unit 3 (VCU3) is different from VCU2 because:
a. VCU2 cannot be spent in the real world; VCU3 can be spent in the real world. b. In terms of convertibility, there is no difference; both VCU2 and VCU3 can be purchased with and sold for legal tender. c. VCU3 can directly affect real world demand, whereas VCU2 cannot affect real-world demand. d. In terms of their potential to change a nation's monetary base, there is no difference because neither VCU3 nor VCU2 affect a nation's monetary base.
Suppose that the EPA has proposed strict controls on the amount of sulfur that diesel fuel contains. These controls were designed to fully offset the cost of pollution generated by diesel fuel vehicles. The effect of the regulation is estimated to increase the equilibrium price of a gallon of diesel fuel by 10 cents. Assuming that the supply of diesel fuel has a positive slope and demand has a negative slope, one can infer that the EPA determined that:
A. the external cost of using diesel fuel is greater than 10 cents. B. the external cost of using diesel fuel is less than 10 cents. C. the external benefit of using diesel fuel is less than 10 cents. D. the external cost of using diesel fuel is equal to 10 cents.
Other things constant, which of these is likely to increase the supply of tomatoes in the market?
What will be an ideal response?