In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of $5 per widget is imposed. The price paid by buyers increases by $2 and the after-tax price received by sellers falls by $3 . The
government is able to raise $750 per month in revenue from the tax. The deadweight loss from the tax is
a. $250.
b. $125.
c. $75.
d. $50.
b
Economics
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For a mortgage lender that makes mortgage loans to borrowers, which one of the following would be an example of moral hazard?
a. After the loan has been made, individuals become careless with their finances b. Individuals most likely to default are the ones most likely to apply for the loan c. Lenders performing a credit check on all potential borrowers d. None of the above
Economics
Since 1960, there have been how many years of budget surplus?
a. 5 b. 10 c. 20 d. 30
Economics