If price-taking firms are required to install wet scrubbers on their chimneys to meet EPA regulations and their costs increase as a result, we would expect
a. demand for the product to fall
b. the market supply curve to shift to the left
c. the long-run economic profit of individual firms in the industry to fall
d. the short-run economic profit of individual firms in the industry to remain unchanged
e. short-run profits to rise as the industry raises price more than the cost of pollution
B
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Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole. Which of the following explanations for Flack's vote is most consistent with the public choice model?
A) Congressman Flack did not have time to read and understand all of the legislation he voted on. Members of Congress often depend on their staffs to read proposed legislation and recommend how they should vote. B) Legislators such as Congressman Flack are similar to other decision-makers in that they sometimes make irrational choices. C) Congressman Flack expects Congressman Walpole's support for programs that will benefit Flack's constituents. D) Congressman Flack will support programs of legislators from his own party, regardless of who benefits from these programs.
What was not one of the problems of the Articles of Confederation?
a. It did not allow the federal government to tax. b. It did not give the federal government sufficient power to define international relationships. c. It could not keep the states together as a political union. d. It did not give the federal government the sole right to mint coins.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. The difference in expected earnings if John chooses to expand versus not expand is:
A. $120,000. B. $200,000. C. $320,000. D. $150,000.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.