Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described, if the market price of hammers was $12, then total producer surplus would be:
A. $9.
B. $30.
C. $17.
D. $7.
Answer: D
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Instead of taking the dirty laundry with you when you go back to visit your parents, you use a Laundromat. Your use of the Laundromat means that
A) GDP will remain the same. B) GDP will decrease and the country's standard of living will fall. C) what you paid for use of the Laundromat will be included in GDP. D) real GDP does not change because the clothes are still being laundered but nominal GDP rises since you are now paying for the service. E) your parents' contribution to GDP will increase.
Pluralistic ignorance exists when the members of a group believe one thing but mistakenly assume that most of the other members believe something else
Indicate whether the statement is true or false
Which of the following pricing practices, if proved, would prove a firm engaged in predatory pricing?
A) The firm sets prices below marginal cost per unit. B) The firm sets prices below sunk cost per unit. C) The firm sets prices below total cost per unit. D) The firm sets prices low enough to drive all its competitors out of business. E) None of the above would prove predatory pricing had occurred.
The idea that a government budget deficit decreases investment is called
A) government dissaving. B) the crowding-out effect. C) the Ricardo-Barro effect. D) the capital investment effect.