If price is initially above the equilibrium level,
A) the supply curve will shift rightward.
B) the supply curve will shift leftward.
C) excess supply exists.
D) all firms can sell as much as they want.
C
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In the presence of asymmetric information, a fixed-fee contract
A) achieves production efficiency. B) can lead to opportunistic behavior on the part of the agent. C) is impossible to write. D) will result in the principal earning all of the profit.
Assume that for good X the supply curve for a good is a typical, upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. If the good is taxed, and the tax is doubled, the
a. base of the triangle that represents the deadweight loss doubles. b. height of the triangle that represents the deadweight loss doubles. c. deadweight loss of the tax quadruples. d. All of the above are correct.