Suppose that the demand for lava lamps is elastic, and the supply of lava lamps is inelastic. A tax of $2 per lamp levied on lava lamps will increase the price paid by buyers of lava lamps by

If marginal benefit is equal to marginal cost, then the

A) producer surplus is equal to the consumer surplus. B) sum of producer surplus and consumer surplus is as large as possible. C) sum of producer surplus and consumer surplus equals zero. D) market has squeezed out total surplus so that it equals zero. E) deadweight loss is more than zero but less than its maximum.

Which of these variables remains exogenous throughout Chapter 3?

A) the interest rate B) investment C) price level D) all of the above