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Author Question: Suppose the government has declared beer to be an illegal substance and has imposed equal penalties ... (Read 86 times)

danielfitts88

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Suppose the government has declared beer to be an illegal substance and has imposed equal penalties on any person caught buying a beer and on any person caught selling a beer.
 
  Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect? A) 5 per quart and 300 quarts of beer
  B) 3 per quart and 500 quarts of beer
  C) 3 per quart and 100 quarts of beer
  D) 1 per quart and 300 quarts of beer

Question 2

With respect to labor supply, the substitution effect means a
 
  A) person increases his or her hours of labor in response to a higher wage rate.
  B) person decreases his or her hours of labor in response to a higher wage rate.
  C) person substitutes high paying work for low paying work.
  D) firm substitutes capital for labor.



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owenfalvey

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Answer to Question 1

C

Answer to Question 2

A




danielfitts88

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it


dreamfighter72

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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