Price controls:
a. are always popular with consumers because they lower prices.
b. create shortages.
c. increase producer surplus because firms can now sell a greater quantity of a good at a lower price.
d. are necessary to preserve equity.
b
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The model of monopolistic competition assumes that
a. there are only a few sellers b. there are significant barriers to exit c. each firm charges the same price for its output d. the buyers are price setters e. firms are strategically independent
In 1962, Michael Harrington argued in The Other America that there was chronic, severe poverty in America.
Answer the following statement true (T) or false (F)
Technological change that makes it easier to produce in a "cleaner" fashion would cause
A) the marginal cost curve of pollution abatement to shift left, increasing the degree of air quality. B) the marginal cost curve of pollution abatement to shift right, increasing the degree of air quality. C) the marginal benefit curve of pollution abatement to shift right, increasing the degree of air quality. D) the marginal benefit curve of pollution abatement to shift left, increasing the degree of air quality.
Suppose the supply of land is perfectly inelastic and landowners are receiving payments equal to $100,000 an acre. If the government taxed the landowners' income with a tax rate of 20 percent, how much tax would the government collect?
A. less than $20,000 because the owners would change their behavior so as to pay less tax B. $20,000 because the use of the land doesn't depend on the price the landowners receive for the land C. more than $20,000 because the combined effects of all the owners trying to change their behavior actually would generate higher returns D. zero, because the owner would do something else with the tax rather than pay such a high tax