In a competitive market, the demand and supply curves are Q = 12 - P and Q = 5P, respectively. If output is fixed at Q = 11, what is the amount of the resulting deadweight loss?
A) 0
B) 0.6
C) 11.4
D) 15
C
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If a tax of $1 a can is imposed on the buyers of sugary drinks, the demand for sugary drinks ______ and the price that buyers pay ______
A. doesn't change; doesn't change B. doesn't change; rises by $1 a can C. decreases; rises by more than $1 a can D. decreases; rises by less than $1 a can
Robert Lucas argues that there are ________ returns to human capital, and these productivity increases are not completely captured by individuals as they decide how much education to purchase
As a result, the market produces ________ education and training. A) increasing; too little B) increasing; too much C) decreasing; too little D) decreasing; too much
Boeing Corporation and Airbus Industries are the only two producers of long-range commercial aircraft. This market is not perfectly competitive because:
A) each company has annual sales over $10 billion. B) each company can significantly affect prices. C) Airbus receives subsidies from the European Union. D) Airbus cannot sell aircraft to the United States government. E) all of the above
Suppose the marginal propensity to consume (MPC) equals 0.80, an increase in autonomous investment of $100 will lead to an increase in real Gross Domestic Product (GDP) by
A) $100. B) $400. C) $500. D) $800.