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If the government removes a tax on buyers of a good and imposes the same tax on sellers of the good, then the price paid by buyers will
not change and the price received by sellers will not change
Frank drinks purple cola. he can buy as many cans of purple cola as he wishes at a price of $0.50 per can. On a particular day, he is willing to pay $0.95 for the first can, $0.80 for the second can, $0.60 for the third can, and $0.40 for the fourth can. Assume Frank is rational in deciding how many cans to buy. His consumer surplus is
which of the following will cause an increase in producer surplus?
the price of a substitute increases
if it is illegal for a biochemical manufacturer to release its waste into a nearby stream, then this is an example of
when a good is rival in consumption
one person's use of the good diminishes another person's ability to use it
When there is a technological advance in the ice cream industry, consumer surplus in that market will
If a binding price ceiling is imposed on the computer market, then
a shortage of computers will develop
consumer surplus in a market can be represented by the
area below the demand curve and above the price
In the housing market, the implementation of a binding rent control policy would cause
quantity supplied to fall and quantity demanded to rise
in the absence of transaction costs, private parties can solve the problem of externalities on their own
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