If price supports are established, and producers are producing more than consumers want to buy at that price, to maintain producers' income the government will have to:
A. Reduce price supports
B. Increase price supports
C. Buy the surplus
D. Restrict output
C. Buy the surplus
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Behavioral game theory assumes
A) people act rationally. B) people are subject to biases that cause them to act irrationally. C) that people behave differently when playing games than when "playing for real." D) people optimize using all available information.
Refer to the above figure. If the union wants to maximize the total income of its members who work, it will set wages at
A) W1. B) W2. C) W3. D) W4.
The introduction of a tax in a perfectly competitive marketplace that is originally in equilibrium will only affect consumer’s surplus and not producer’s surplus.
Answer the following statement true (T) or false (F)
A small business owner earns $60,000 in revenue annually. The explicit annual costs equal $10,000. The owner could work for someone else and earn $25,000 annually. The owner's accounting profit is ________ and owner's economic profit is ________
A) $20,000; $5,000 B) $50,000; $25,000 C) $25,000; -$5,000 D) $45,000; -$5,000