If individuals are rational, they should choose actions that yield the:
A. smallest economic surplus.
B. largest economic surplus.
C. smallest total costs.
D. largest total benefits.
Answer: B
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In the long run, monetary policy can
a. change the form of inflation b. change the type of unemployment c. change the level of unemployment d. stop the flow of currency abroad e. change the rate of inflation
The supply curve for motor oil is the typical upward-sloping straight line, and the demand curve for motor oil is the typical downward-sloping straight line. When motor oil is taxed, the area on the relevant supply-and-demand graph that represents the deadweight loss is
a. larger than the area that represents consumer surplus in the absence of the tax. b. larger than the area that represents government's tax revenue. c. a triangle. d. All of the above are correct.