Refer to Figure 6.3. On this graph, area BCEO represents:
A. producer surplus.
B. total surplus.
C. consumer expenditures.
D. firm profits.
Answer: C
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In neoclassical growth theory, technological progress is the key to continuous growth in labor productivity
Indicate whether the statement is true or false
Suppose the market demand curve is perfectly elastic in an increasing-cost industry. If an output tax of t per unit is imposed on all producers of the good, what happens to the market equilibrium outcome?
A) The price paid by buyers increases and output declines B) The price paid by buyers does not change and output decrease C) The price paid by buyers and output increase D) The price paid by buyers and output decrease
What is the present value of a payment of $5,000 at the end of one year and a second payment of $7,000 at the end of two years if the interest rate is 5 percent?
A) $11,201.84 B) $10,985.14 C) $11,111.11 D) $12,250.32
Which of the following is true of the marginal revenue curve of a monopolist? a. It always lies below the demand curve. b. It always lies above the demand curve. c. It has a slope of 2
d. It has a slope of 1.