Return to the market for cigarettes from the previous questions. Suppose the government implements the tax you found in the previous question. But suppose the government is making a mistake. The true demand curve is in fact , and this is not a result of any behavioral bias. Compute the deadweight loss of the government's tax policy
a. DWL = 0.
b. DWL = 500.
c. DWL = 1,000
d. DWL = 2,500.
d
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Which of the following statements is true?
a. TC = TFC ? TVC. b. AVC = TC / Q. c. TFC = TC ? TVC. d. MC equals the change in ATC divided by the change in Q.
The tragedy of the commons refers to the:
A. overuse of resources that have no price. B. failure of the Coase theorem when negotiation is costly. C. under production of goods that have external benefits. D. overuse of resources that have no cost.
Use the following graph to answer the question below.
The price where marginal benefit equals marginal cost is
A. $1.60. B. $1.00. C. $2.90. D. $0.50.
Suppose a share of stock is expected to pay an annual dividend of $12 forever. At a discount rate of 9.4 percent, the share's market price should be
A) $12.77. B) $13.13. C) $112.80. D) $127.66.