A surplus occurs when the price is
A) less than the equilibrium price.
B) equal to the equilibrium price.
C) greater than the equilibrium price.
D) None of the above because the existence of a surplus is independent of the price of the good.
C
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Provide the definition for a regressive tax and give an example
What will be an ideal response?
Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is TRUE?
A) The production function has decreasing returns to scale. B) The production function has increasing returns to scale. C) The production function has constant returns to scale. D) Returns to scale vary with the level of output.
The law of comparative advantage says that
a. the individual with the lowest opportunity cost of producing a particular good should produce it b. comparative advantage exists only when one person has an absolute advantage in the production of two goods c. whoever has a comparative advantage in producing a good also has an absolute advantage in producing that good d. whoever has an absolute advantage in producing a good also has a comparative advantage in producing that good e. gains from trade are possible only when one person has the comparative advantage in producing both goods
The key to a successful positive signal is that:
A. it is hidden information. B. it builds trust between the principal and the agent. C. it is costly to fake. D. All of these statements are true.