Refer to Figure 14-3. How will Rainbow Writer respond to Odeon's two possible offers?
A) Rainbow Writer will accept either offer.
B) Rainbow Writer will reject either offer.
C) Rainbow Writer will only accept an offer of $30 per copy of the software package.
D) Rainbow Writer will only accept an offer of $40 per copy of the software package.
D
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Which of the following statements is true?
A) Producer surplus measures the total benefit received by producers from participating in a market. B) When a market is in equilibrium consumer surplus equals producer surplus. C) Consumer surplus measures the total benefit from participating in a market. D) Consumer surplus measures the net benefit from participating in a market.
The amount that a seller is paid for a good minus the seller’s actual cost is called:
a. producer surplus. b. consumer surplus. c. total surplus. d. demand surplus.
In the presence of positive externalities, a market will charge ________ and produce ________.
A. the correct amount; too little B. too little; too little C. the correct amount; the correct amount D. too much; the correct amount
Superstars in sports or entertainment presumably would be willing to continue working in their specific areas for lower income than they are currently earning. This implies that
A) the large salaries serve no allocative function and only serve to make the superstars richer. B) superstars are exploiting their fans by receiving such a large salary. C) superstars do not respond to monetary incentives. D) the high salaries are used to allocate their time but fail to bring in new sources of supply (other superstars) that are exactly like themselves.