A firm sets its output where
A) marginal profit minus marginal cost equals zero (MP - MC = 0).
B) marginal revenue minus marginal profit equals zero (MR - MP = 0).
C) marginal revenue minus marginal cost equals zero (MR - MC = 0).
D) marginal revenue minus marginal cost is greater than zero (MR - MC > 0)
C
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The government expenditure multiplier is used to determine the
A) amount aggregate supply is affected by a change in government expenditure. B) amount aggregate demand is affected by a change in government expenditure. C) extra scrutiny government action receives. D) amount private consumption is decreased by government expenditure. E) extent to which automatic stabilizers must be changed in order to avoid recessions.
Based on the figure above, when the market is unregulated and is in equilibrium, the deadweight loss is
A) $86.25 million per year. B) $56.25 million per year. C) $48.75 million per year. D) $37.50 million per year. E) zero.