The above figure shows the demand and supply curves in the market for milk. If the government imposes a quota at 500 gallons, calculate the deadweight loss
What will be an ideal response?
DWL = .5(4 – 2 )(1000 – 500 ) = 500
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A decrease in the price of a complement in production leads to
A) no change in the supply of the good in question. B) an increase in the supply of the good in question. C) a decrease in the supply of the good in question. D) a decrease in the quantity supplied of the good in question. E) an increase in the supply of the good in question and a decrease in the quantity supplied of the good in question.
Generally speaking, which of the following groups would tend to gain real income from the wealth effects of inflation?
A. People who purchase long-term bonds when interest rates are low B. People who have passbook savings accounts C. People who own assets that are appreciating faster than the inflation rate D. People who hold all of their assets in the form of cash
(Scenario: Growth Rates) Look at the scenario Growth Rates. According to the rule of 70, how large will China's real GDP per capita be in 20 years?
What will be an ideal response?
The idea that reductions in tax rates will increase tax revenue is illustrated by the:
A. Laffer Curve B. Short-run Phillips Curve C. Long-run Phillips Curve D. Aggregate supply curve