Suppose the government wants to reduce the illegal importation of exotic animals used as pets and tries to achieve this goal by interrupting the supply of illegally imported exotic animals
If the demand for these animals is highly elastic, this government effort will result in A) a small reduction in the quantity of exotic pets demanded.
B) a large reduction in the quantity of exotic pets demanded.
C) no change in the quantity of exotic pets demanded.
D) an increase in the quantity of exotic pets demanded.
B
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What happens to the Phillips curve when the expected rate of inflation rises?
A) The curve shifts to the left. B) The curve becomes horizontal. C) The Phillips curve is unaffected. D) The curve shifts to the right.
Suppose that Charles wants to dine at a fancy restaurant, but the only available table is in the smoking section. Charles dislikes the smell of cigarette smoke. He notices that only one person, Sam, is smoking in the smoking section. Charles values the absence of smoke at $40 . Sam values the ability to smoke in the restaurant at $15 . Which of the following represents an efficient solution in
the absence of transaction costs? a. Sam continues to smoke because he has a right to smoke in the smoking section. b. Charles offers Sam between $15 and $40 not to smoke. Sam accepts, and both parties are better off. c. Charles offers Sam between $15 and $40 not to smoke. Sam declines because he has a right to smoke in the smoking section. d. Only a government policy banning smoking in restaurants will solve this problem.