The path of the game in Figure 12.7 will be:
A. Fred chooses a large quantity and Barney stays out.
B. Fred chooses a large quantity and Barney enters.
C. Fred chooses a small quantity and Barney stays out.
D. Fred chooses a small quantity and Barney enters.
Answer: A
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If a producer must pay the cost of his or her pollution because property rights have been assigned, then
A) pollution will be completely eliminated. B) the supply curve will shift rightward as the new costs are added. C) the supply curve will shift leftward as the new costs are added. D) consumers will now consume more of the good because the external costs are reduced. E) there is no longer any marginal benefit from the good or service being produced.
Whether real seignorage revenue increases when the rate of money growth increases depends on whether
A) the rise in real money holdings outweighs the decline in inflation. B) the rise in inflation outweighs the decline in real money holdings. C) the rise in inflation ratio outweighs the decline in the real supply of currency. D) the rise in the real supply of currency outweighs the decline in inflation.
The largest rent subsidy program provides what is called ______
a. Section 6 housing. b. Section 8 housing. c. public housing d. AFCD housing
Refer to Figure 9.4. If the government establishes a price floor of $40 and government purchases the surplus over quantity demanded, producer surplus will
A) fall by $275. B) fall by $500. C) remain the same. D) rise by $275. E) rise by $500.