Study Guide for Microeconomics
9th Edition
ISBN: 9780134741123
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 9, Problem 6RQ
To determine
Explain the reason for price supports or acreage-limitation programs cost society.
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If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or five years from now
If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking after 1 year from now or 5 years from now? Explain
“Because consumers as a group must ultimately pay the total income received by farmers, it makes no real difference whether the income is paid through free farm markets or through price supports supplemented by subsidies financed out of tax revenue.” Do you agree?
Chapter 9 Solutions
Study Guide for Microeconomics
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- Are voters likely to be well informed on issues and the positions of candidates? Why or why not? What are the effects of government intervention in markets with some of the price regulations like price floors and price ceilings we discussed in chapter 4?arrow_forwardA government of a country X would like to administer two programs that affect the market for cigarettes. Media campaigns and labeling requirements are aimed at making the public aware of the dangers of cigarette smoking. At the same time, the Department of Agriculture maintains a price support program for tobacco farmers, which raises the price of tobacco above the equilibrium price. 1- How do these two programs affect cigarette consumption? 2- Use a graph of the cigarette market in your answer. 3- What is the combined effect of these two programs on the price of cigarettes? 4- Cigarettes are also heavily taxed. What effect does this tax have on cigarette consumption?arrow_forwardIgnoring rationing problems and black markets, under rent control (or any price ceiling that produces a shortage) the price paid by consumers equals the marginal cost of producing the good. Does this mean the output level is efficient? Explain.arrow_forward
- Which of these claims is NOT a claim the book reports most economists agree about? Question 1 options: All the other answers are incorrect Local and state governments should eliminate subsidies to professional sports franchises The United States should eliminate agricultural subsidies A ceiling on rents reduces the quantity and quality of housing availablearrow_forwardHow can a free-market eliminate shortages?arrow_forwardplease examine the factors that can motivate the government to reduce the price of rice at $20 per 10 kg bag and the effects of that government legislation on the rice marketarrow_forward
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