Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If 10,000 units of iced tea are sold
A) the marginal benefit of each of the 10,000 units of iced tea equals $3.
B) marginal benefit is less than marginal cost.
C) the deadweight loss is equal to economic surplus.
D) producer surplus equals consumer surplus.
A
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When Joe's Gas raises its price for regular unleaded gasoline, total revenue from regular unleaded gas falls to zero. It must be the case that
A. there are not many good substitutes for Joe's regular unleaded gasoline. B. the demand for Joe's regular unleaded gasoline is perfectly elastic. C. the demand for Joe's regular unleaded is inelastic. D. consumers are switching to premium grades of gasoline.
Answer the following statement(s) true (T) or false (F)
1. On average over all goods, it has been found that as people become wealthier, expenditures for higher quality grow more rapidly than expenditures for increased quantity. 2. The cross elasticity between California and Florida oranges is likely to be negative because they are substitutes for one another. 3. If the cross price elasticity of demand is negative, then the two goods under consideration must be complements. 4. If the cross-price elasticity for oranges with respect to apples is 1.2 and the price of apples increase by 5%, then we can expect the quantity demanded of oranges to decrease by 6%.
The marginal social costs and abatement costs of a certain type of air pollution for a factory are given as:
MSC = -1121 + 22.5Q MCA = 879 - 17.5Q, where Q = units of pollution per day, and MSC and MCA are measured in dollars. The factory is located in a small town that is currently setting community standards. You have been hired to perform the analysis requested below. a. If the community wishes to set a pollution standard for the factory, what daily level of pollution should be allowed? b. As an alternative, some members of the town council favor an emissions tax for the factory. If a tax is implemented, at what level should the tax be set?
After graduating from high school, Steve had the following three choices for his immediate future, listed in order of preference: (1) attend our campus, (2) work in a printed circuit board factory, or (3) attend a rival college. His opportunity cost of going to college here includes which of the following?
a. The cost of books and supplies at the rival college b. The income he could have earned at the printed circuit board factory plus the direct cost of attending college here (tuition, textbooks, etc.) c. The benefits he could have received from going to the rival college d. Only the tuition and fees paid for taking classes here e. Cannot be determined from the information given