Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. The government offers a subsidy of $800 to the buyers of drones
Producer surplus is ________ and consumer surplus is ________. A) $300; $200
B) $300; $1,000
C) $1,100; $800
D) $1,100; $600
B
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Suppose external costs are present in a market which results in the actual market price of $70 and market output of 150 units. How does this outcome compare to the efficient, ideal equilibrium?
a. The efficient price would be higher than $70. b. The efficient price would be lower than $70. c. The efficient price would also be $70. d. The efficient output would be greater than 150 units.
Which of the following events must cause equilibrium price to fall?
a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase
Suppose the economy is currently operating on both the LM curve and the IS curve. Which of the following is true for this economy?
A) Production equals demand. B) The quantity supplied of bonds equals the quantity demanded of bonds. C) The money supply equals money demand. D) Financial markets are in equilibrium. E) all of the above
Price discrimination is more common in service industries because:
A. Low price buyers will find it virtually impossible to resell the products of such industries to high price buyers B. The costs of providing such industries' products to different groups of buyers vary dramatically C. The price elasticity of demand is the same for all groups of buyers in these industries D. All firms in these industries have significant monopoly power over price