If the intended aim of the price floor set in the graph shown was a net increase in the well-being of producers, then positive analysis would have us consider:
A. whether the surplus transferred from producers to consumers is larger than the consumer surplus lost to deadweight loss.
B. whether the surplus transferred from consumers to producers is larger than the consumer surplus lost to deadweight loss.
C. whether the producer surplus lost to deadweight loss is greater than the producer surplus gained from a higher price.
D. whether the producer surplus lost due to lower prices is greater than the producer surplus lost due to fewer transactions taking place.
C. whether the producer surplus lost to deadweight loss is greater than the producer surplus gained from a higher price.
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Suppose a report from the Bureau of Labor Statistics states that the CPI for the year 2012 was 152. What is the percentage point increase in the prices of the goods and services since the reference base period?
A) 252 percent B) 100 percent C) 52 percent D) 48 percent E) 152 percent
Explain the difference between Microeconomics and Macroeconomics
What will be an ideal response?
The abnormal net income model
A) assumes that economic profits cannot be earned in the short run. B) assumes that economic profits cannot be earned in the long run. C) employs economic profit in its valuation of a firm. D) none of these choices.
Which of the following is a justification for transfer payments?
a) transfers can create a more ethically acceptable income distribution b) income redistribution provides insurance against misfortune c) poverty creates negative externalities such as crime and disease d) myopic individuals make time-inconsistent saving decisions e) all of the above