Refer to Figure 9.4. If the government establishes a price floor of $40 and government purchases the surplus over quantity demanded, producer surplus will
A) fall by $275.
B) fall by $500.
C) remain the same.
D) rise by $275.
E) rise by $500.
E
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Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $40, the hotel manager should rent one of the empty rooms only if a customer is willing to pay
a. more than $40, as the average benefit will exceed the marginal cost. b. more than $40, as the marginal benefit will exceed the marginal cost. c. more than $80, as the average benefit will exceed the marginal cost. d. more than $80, as the marginal benefit will exceed the marginal cost.
Identify which of the following are included in the government purchases component of GDP. the salary paid to a state court judge unemployment insurance benefits the payment made by the federal government for a jet fighter social security payments a county builds a jail building
An increase in supply, holding demand constant, will cause:
a. Higher prices and a larger quantity sold b. Lower prices and a larger quantity sold c. Higher prices and a smaller quantity sold d. Lower prices and a smaller quantity sold
Measured in terms of farm employment and the number of farms, agriculture has been:
A. a declining industry. B. an expanding industry. C. a stable industry. D. a volatile industry.