Refer to the scenario above. Suppose a new legislative policy decreases the fine for speeding to $50. A reduction in the fine to $50:
A) makes it profitable for you to bribe.
B) makes it profitable for Joe to bribe.
C) changes the outcome of the game.
D) will not change your dominant strategy.
D
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If a tax is increased, a. consumers will pay a higher price
b. consumers will lose consumer surplus. c. producers will receive a lower price after taxes. d. all of the above are true.
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real GDP and reserves account in the context of the Three-Sector-Model? a. Real GDP rises and reserves account becomes more positive (or less negative)
b. Real GDP rises and reserves account remains the same. c. Real GDP and reserves account remain the same. d. Real GDP rises and reserves account remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
consumer surplus
What will be an ideal response?
The figure above shows the market for pants. If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,
A) there would be no deadweight loss. B) the government's policy would have no effect on the sum of consumer surplus and producer surplus. C) a deadweight loss would result. D) the government's policy would increase the sum of consumer surplus and producer surplus. E) production would be even more efficient than if 6 million pairs of pants are produced because more is always better than less.