The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $500 per apartment, the deadweight loss will be

Suppose that if a local McDonald's restaurant reduces the price of a Big Mac from $4.00 to $3.25, the number of Big Macs it sells per day will increase from 4 to 5. Explain the output effect and the price effect resulting from this change

Using a graph, illustrate both the loss in revenue from selling each of the first 4 Big Macs for $0.75 less and the additional revenue from selling 1 more Big Mac. What is the total change in revenue received which results from this price decrease?

Corrective taxes are often difficult to implement because _____

a. those affected by the externality are often loathe to use political means to implement the tax b. those creating the externality threaten to shut down c. those who suffer from the externality refuse to talk about it d. the creator of an externality will use political means to try to prevent the tax