The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. Bob's expected wealth is

How would the market for coffee be affected if the government charged an excise tax of $1.00 on each unit of coffee sold?

A) There would be a shortage of coffee. B) The demand for coffee would increase. C) The demand for coffee would decrease. D) The supply curve would shift up vertically by $1.00.

If the U.S. government decides to eliminate a budget surplus by reducing taxes, the most likely effect would be

a. falling prices. b. a reduction in the trade deficit. c. an increase in unemployment. d. upward pressure on prices.