Suppose that the price of a coffee mug is $2. Lee's marginal cost of producing coffee mugs $0.50 for the first mug, Tammy's marginal cost of producing coffee mugs is $1 for the second mug, Stan's marginal cost of producing coffee mugs is $1.50 for the third mug, Joy's marginal cost of producing coffee mugs is $2 for the fourth mug, and Jody's marginal cost of producing coffee mugs is $3 for the fifth mug. In equilibrium, what is the producer surplus from producing coffee mugs?
A. $0
B. $2
C. $3
D. $6
Answer: C
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Which of the following statements about the national debt has the most validity?
A. Our large national debt can bankrupt the nation. B. If only Americans hold the debt, then payments of interest and principal are simply transfers from some Americans to other Americans. C. Our large national debt can lead to subjection by the people (especially foreigners) who hold the debt. D. The national debt represents a burden to future generations who will have to make huge payments of interest and principal.
The short-run Phillips curve is the relation between inflation and unemployment that holds for a given natural rate of unemployment and a
A. given level of unemployment. B. given expected rate of inflation. C. given rate of inflation. D. given expected level of unemployment.
Games:
A. only have one possible stable outcome. B. may have noncooperative equilibriums that are positive-positive outcomes. C. must have a dominant strategy present in order to reach an equilibrium. D. None of these statements is true.
The total value of government securities held by individuals, businesses, government agencies, and the Federal Reserve is known as
a. negotiable IOUs b. money market funds c. the deficit d. public debt e. general (private and public) debt