Which of the following is a CORRECT statement?
A) Producer surplus is an external benefit.
B) Consumer surplus is an external benefit.
C) A government subsidy paid to a producer is an external benefit.
D) None of the above statements are correct.
D
You might also like to view...
Expected utility theory predicts that individuals will fully insure in actuarily fair markets so long as their tastes are state-independent. How might adverse selection result in some individuals under-insuring?
What will be an ideal response?
Suppose a country, whose production and consumption of cell phones is large relative to the world market, has just entered the global market. If the country is a net-importer of cell phones, we would expect:
A. an increase in both world price and quantity of cell phones. B. an increase in world price and decrease in world quantity of cell phones. C. a decrease in both world price and quantity of cell phones. D. a decrease in world price, and increase in world quantity of cell phones.
If there are 500 identical firms in this market, what is the value of Q2?
a. 12,000 b. 60,000 c. 240,000 d. 300,000
Which of the following statements is true?
A) Opportunity cost = explicit cost - implicit cost. B) Variable cost = wages + salaries + benefits. C) Total cost = fixed cost + variable cost. D) Total cost = fixed cost + implicit cost.