The above figure shows supply and demand curves for milk. If the government passes a $2 per gallon specific tax, the loss in producer surplus will equal

Which point in the figure above is an attainable combination that would have unemployed resources?

A) point A B) point B C) point C D) point D E) point A and point B

In the classical model with an open economy, an increase in government purchases always causes complete crowding out

a. True b. False