Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The producer surplus after the tax is:
A. $3.56 million.
B. $4.50 million.
C. $1.89 million.
D. $7.11 million.
A. $3.56 million.
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Refer to Table 9-12. With trade, what is the total gain in belt production?
A) 20 B) 40 C) 60 D) 120
Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The loss in consumer surplus due to the tax is:
A. $3.56 million. B. $1.89 million. C. $7.11 million. D. $944,444.
A recessionary gap means that short-run macroeconomics equilibrium GDP...
What will be an ideal response?
Firms in a perfectly competitive industry are earning economic losses. This is
A) a signal to entrepreneurs that some of the firms in the industry should exit and the resources of these firms should move into production of other goods. B) a signal to entrepreneurs that additional resources should be brought into this industry in order to make it profitable. C) a signal that the entrepreneurs are doing a poor job and should become workers for someone else. D) a signal to government officials that a subsidy is needed for the firms in the industry.