With reference to the graph above, if the intended aim of the price ceiling shown was a net increase in the well-being of consumers, then positive analysis would conclude:
A. the policy was effective, since area A + C is larger than B + D.
B. the policy was effective, since area B is smaller than area D.
C. the policy was ineffective, since D is larger than E.
D. the policy was ineffective, since A + C + D is larger than B + E.
B. the policy was effective, since area B is smaller than area D.
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It is possible for a tax to "internalize" an externality
Indicate whether the statement is true or false
When a country that imports a particular good imposes an import quota on that good,
a. producer surplus increases and total surplus increases in the market for that good. b. producer surplus increases and total surplus decreases in the market for that good. c. producer surplus decreases and total surplus increases in the market for that good. d. producer surplus decreases and total surplus decreases in the market for that good.
Refer to the figure below. If the relevant curves are MC1 and MB2, a rational consumer will acquire ________ units of information, the amount for which marginal benefit for information is ________ its marginal cost.
A. 5; equal to B. 5; more than C. 4; more than D. 4; equal to
Potential real GDP in an economy is
a. the level of production that occurs if there's no cyclical unemployment. b. the amount an economy can produce if every man, woman, and child is employed. c. the level of production that occurs if all unemployment is cyclical and structural. d. the level of production that occurs if the unemployment rate is zero.