At Rick’s Trailer Trove, Rick’s buddy Theodore convinces him to extend production of trailers beyond the current production level in order to gain more producer surplus. This strategy will work if ______.
a. current production exceeds the equilibrium point
b. current production is at the equilibrium point
c. the cost of the additional output exceeds what the buyers will pay for it
d. the cost of the additional output is less than what the buyers will pay for it
d. the cost of the additional output is less than what the buyers will pay for it
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Dumping can never be a profit maximizing strategy for a firm to follow
Indicate whether the statement is true or false
According to the liquidity premium theory, the yield curve normally has a positive slope because
A) short-term interest rates are expected to rise. B) term premiums rise as the time to maturity increases. C) risk premiums rise over time. D) long-term bonds are more liquid than short-term bonds.
If getting people off welfare could be described as a carrot-and-stick approach, it would be fair to say that
A. liberals and conservatives both favor the stick. B. liberals and conservatives both favor the carrot. C. liberals favor the carrot and conservatives favor the stick. D. liberals favor the stick and conservatives favor the carrot.
Hu earns $120,000 per year. He is charged a 20% tax on the first $80,000 he earns. He is charged a 30% tax for any income he earns between $80,000 and $200,000. Approximately what is his average tax rate?
a. 10% b. 23% c. 40% d. 54%