In the above figure, suppose the government subsidizes the production of milk so that milk production increases to 8 million gallons per day
What is the size of the deadweight loss? (Hint: It is equal to the triangular area of negative consumer and producer surplus that results when output exceeds the efficient level.) A) $12.5 million
B) $6.25 million
C) $4.50 million
D) $2.25 million
D
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The slope estimator, ?1, has a smaller standard error, other things equal, if
A) there is more variation in the explanatory variable, X. B) there is a large variance of the error term, u. C) the sample size is smaller. D) the intercept, ?0, is small.
Which of the following statements is correct?
A. Rent performs an incentive function, but not a rationing function B. Wage rate does not perform an incentive function in the supply of labor C. Profits are payments to capital resource owners D. Demand is the "active," and supply the "passive," determinant of land rent