When speculators buy gasoline during the low demand spring in order to sell it during the high demand summer, they cause an increase in dead weight loss in the spring that is more than made up for by an increase in social surplus in the summer.
Answer the following statement true (T) or false (F)
False
Rationale: The behavior increases social surplus both now and in the future.
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An increase in disposable income leads to a
A) rightward shift of the supply of loanable funds curve. B) rightward shift of the demand for loanable funds curve. C) downward movement along the supply of loanable funds curve. D) leftward shift of the supply of loanable funds curve. E) leftward shift of the demand for loanable funds curve.
A rent ceiling results in a shortage. As a result, which of the following do you expect?
A) The shortage will persist as long as the ceiling is in effect. B) Discrimination as landlords choose their tenants, possibly based on race, age, or gender. C) A black market for apartments whereby higher rents are obtained through various other charges. D) All of the above would be expected.
In the first six months of 2003, branches of Commerce Bank in New York City were robbed 14 times
The New York City Police recommended steps the bank could take to deter robberies, including the installation of plastic barriers called "bandit barriers." The police were surprised the bank did not take their advice. According to a deputy commissioner of police, "Commerce does very little of what we recommend. They've told our detectives they have no interest in ever putting in the barriers." It would seem that Commerce Bank would have a strong incentive to install "bandit barriers" to deter robberies. Why wouldn't they do it? A) The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have "no interest in ever putting in the barriers." B) The banks probably resent any interference from the police department. C) The banks would rather delay installation of any theft deterring equipment in anticipation of new, lower-cost innovations in the security devices market. D) The banks are concerned that "bandit barriers" would send the wrong message to customers — that the bank is unsafe.
Suppose that for Alicia the marginal benefit (MB) of producing is $75 and that the marginal cost (MC) of producing is $5. Suppose also that her marginal benefit of stealing is $85 and the marginal cost of stealing is $5. Is Alicia currently maximizing utility in terms of producing and stealing? If not, should she produce more and steal less, or produce less and steal more to move toward utility maximization?
A. Yes, Alicia is maximizing utility. B. No, Alicia is not maximizing utility. Since the MB/MC ratio for producing is less than the MB/MC ratio for stealing, Alicia should produce more and steal less. C. No, Alicia is not maximizing utility. Since the MB/MC ratio for producing is greater than the MB/MC ratio for stealing, Alicia should produce more and steal less. D. No, Alicia is not maximizing utility. Since the MB/MC ratio for producing is less than the MB/MC ratio for stealing, Alicia should steal more and produce less.