In the Absence of Government Interference, There Is a Constant

question 23

Multiple Choice

In the absence of government interference, there is a constant marginal cost of $4 per ounce for growing marijuana and delivering it to buyers.Suppose that government authorities seize shipments whenever they find them and resell the marijuana that they seize on the open market.The probability that any shipment of marijuana is seized is .50.If a shipment is seized, there is no other punishment besides loss of the marijuana that is seized.The effect of the government action is to

• A)raise the equilibrium price by $8.
• B)raise the equilibrium price by $4.
• C)lower the equilibrium price by $2.
• D)leave prices unchanged.
• E)raise the equilibrium price by $2.

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Definitions:

Immune System

A complex network of cells, tissues, and organs in the body that works to defend against infectious diseases and foreign invaders.

Stress

A psychological and physical response to demands or threats, which can affect mental health and overall well-being.

Suppression

The conscious deliberate attempt to push away or hide from conscious awareness thoughts, feelings, or desires deemed unacceptable or uncomfortable.

Optimist

An individual who generally believes that good things will happen and that outcomes will be favorable.