In the above figure, in order to achieve efficiency, a tax of ________ per unit is needed.
A) 3
B) 6
C) 0
D) 2
Ques. 2If Sally drives less carefully after buying auto insurance, she illustrates
A) adverse selection.
B) negative selection.
C) moral hazard.
D) lemon hazard.
Ques. 3The value of resources devoted to rent seeking will
A) at most equal the monopoly's economic profit.
B) reduce deadweight loss.
C) reduce consumer surplus.
D) raise output to an efficient level.
Ques. 4The state Department of Agriculture raised the minimum price for a gallon of milk in the city on Tuesday to 4.37.
If you've got two or three kids and you're living on a fixed income and you're paying half your income on rent, Gioia said, then you're really in a bind and you're making choices you should never have to make. If even after this price increase Gioia's marginal utility per dollar is higher for milk than for other goods, what should Gioia do? A) increase her consumption of milk
B) decrease her consumption of milk
C) not change her consumption of milk
D) increase her consumption of milk only if her income increases
Ques. 5Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 2 cents per page, what is Fast Copy's profit maximizing level of output?
A) 16 pages per hour
B) 32 pages per hour
C) 48 pages per hour
D) 64 pages per hour
Ques. 6A rent ceiling set above the equilibrium rent has no effect.
Indicate whether the statement is true or false
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