The principle that "people face tradeoffs" applies to
a. individuals.
b. families.
c. societies.
d. All of the above are correct.
d
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The market-based system which allocates tradeable pollution permits to companies is known as a cap-and-trade system
Indicate whether the statement is true or false
How is the issue of the "free rider" relevant to the discussion of whether access to medical care is a fundamental right?
a. The socially responsible approach is to provide free access to all the medical care a person desires. b. As long as there is excess capacity in the medical care system, providing free access to care does not present a resource allocation problem. c. The free rider argument is based on the idea that access to medical care should be free and available to everyone. d. Providing medical care at zero cost will maximize social welfare.
Under perfect competition
A. no firm has any influence over price. B. firms are price takers, not price makers. C. many firms produce identical products. D. All of the choices are true under perfect competition.
Jason wants to hire Maria to tutor him in economics. Jason is willing to pay $30 for the first hour of tutoring, $25 for the second, $20 for the third, $15 for the fourth, and $10 for the fifth
Maria has an opportunity cost per hour of $6 for the first, $9 for the second, $12 for the third, $15 for the fourth, and $18 for the fifth. The initial equilibrium price for tutoring is $15 an hour and hence Maria tutors Jason for 4 hours. Now, Maria realizes that she is the only economics tutor because all the other tutors have graduated. Because she is the only tutor, she has a monopoly and, as a monopolist, Maria decides to charge a price of $25 instead of $15 an hour. a. At the price of $25 an hour, how many hours will Maria tutor Jason? b. At the initial equilibrium price of $15 an hour, what was Jason's total consumer surplus and Maria's total producer surplus? c. At the price of $25 an hour, how many hours will Jason hire Maria to tutor him? What is Jason's total consumer surplus and Maria's total producer surplus? d. How does the sum of Jason's consumer surplus plus Maria's producer surplus compare at the initial equilibrium price of $15 an hour (part b) and at the new price of $25 an hour (part c)? Comment on any difference.