You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. What is your economic surplus from working as a math tutor instead of going to the movies?
A. $2
B. $8
C. $12
D. $10
Answer: A
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An industry supply curve is the horizontal summation of the supply curves of all of the individual firms.
Answer the following statement true (T) or false (F)
Which of the following activities would be included in GDP?
A. You pay a friend $30 to bake a cake. B. You buy a cake from a local bakery for $30. C. You bake a cake for yourself. D. All of these would be included in GDP.
Answer the following statement true (T) or false (F)
1) The demand for labor is a derived demand, whereas the demand for capital is not. 2) The MRP of labor curve is the firm's labor demand curve. 3) Marginal revenue product (MRP) is the change in total product (total output) associated with hiring an additional unit of labor. 4) A firm should reduce its employment of a resource whose marginal resource cost exceeds its marginal revenue product.
As compared to the market clearing price, the total amount of consumer surplus and producer surplus is
A) greater for a government-imposed price floor that is higher than that market clearing price. B) greater for a government-imposed price ceiling that is lower than that market clearing price. C) the same as a government-imposed price floor that is higher than that market clearing price. D) smaller for a government-imposed price ceiling that is lower than that market clearing price.