Max has allocated $100 toward meats for his barbecue. His budget line and indifference map are shown in the above figure. If Max is currently at point d,
A) his MRS is larger than the trade-off offered by the market.
B) he is willing to give up more chicken than he has to, given market prices.
C) he is not maximizing his utility.
D) All of the above.
D
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Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. If the government imposes a $250 tax on the sale of drones,
A) Sammy and Dean would not be able to complete the transaction. B) Sammy and Dean would still be able to complete the transaction. C) the tax would cause a deadweight loss of $500. D) Both A and C are correct.
In the above figure, the second ton of wheat would be produced even though the producer surplus on it is zero if the price per ton of wheat was
A) $25. B) $50. C) $75. D) $100.
If a firm shuts down in the short run
A) it will lose its operating costs. B) its losses will be equal to zero. C) it will incur its fixed costs. D) it will incur only its explicit costs.
Full employment to the classical school means that all workers
a. in the labor market are employed b. at any given wage rate are or will be employed c. who work at the equilibrium wage rate would not have been willing to work for less or more d. who are willing to work at the equilibrium wage rate are employed e. who are in the labor force are employed all the time