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The short-run supply of a certain crop is perfectly inelastic, because it has already been harvested and no more of it can be grown until the next growing season. In order to raise the price received by farmers, the government orders the destruction of a percentage of the harvest. Does this action result in a deadweight loss? Why or why not? Assume that the cost of distributing the crop to consumers is zero.
What are the pros and cons of monetization of public debt
Q. Describe the Keynes motivation? Keynes' motivation: In good times, when Y is high (above its trend), national income is high (above it trend). Consumers will take this opp
explain the terms abnormal profits and normal profits
effects of tax increase on the gross domestic product
Fiscal Policy An Increase in Government Spending: Figure 1 Let us examine how an increase in government spending affects the interest rate and the level of income.
Outline briefly a. How people make decisions? b. How they interact? c. How economy as a whole works? 1. Give three examples of important trade offs, th
factors affecting national income
The sales counter next to the soft toy display in Shambles receives a customer every 2-4 minutes. Most of these customers (80%) are buying toys and are dealt with by the cashier i
Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for t
Marginal cost curves generally slope: a) downward because of decreasing opportunity cost b) upward because of decreasing opportunity cost c) downward because of increasing opp
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