The gains from trade within a price system is
A) the sum of consumer surplus and producer surplus.
B) consumer surplus less producer surplus.
C) consumer surplus divided by producer surplus.
D) consumer surplus multiplied by producer surplus.
Answer: A
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When a monopsony hires an additional worker, it must pay the new worker's wages and it bids up the wages of all workers. This fact implies that the monopsony's
a. marginal labor cost is greater than the wage rate. b. demand curve for labor is perfectly elastic at the going market wage. c. marginal revenue product of labor is equal to the wage rate. d. labor usage is greater than that of a firm that is competitive in the labor market.
Asset-price bubbles ________
A) are a relatively recent phenomenon B) end with an increase in asset prices C) have been a feature of market economies for centuries D) are likely to be prevented by advances in computer technology and telecommunications
A. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 5%?
b. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 8%? c. If a stock is expected to pay an annual dividend of $20 this year, what is the approximate present value of the stock, given that the discount rate is 8% and dividends are expected to grow at a rate of 2% per year?
A monopolist that engages in perfect price discrimination
a. divides all buyers into two mutually exclusive groups b. refuses to sell to consumers of certain races, sexes, or creeds c. charges the same price for every unit sold d. charges a different price for every unit sold e. charges buyers who want a little of the good a low price and charges buyers who want a lot of the good a high price