Refer to the above table. Suppose both governments offer their respective company a subsidy of $4(million)
What will be an ideal response?
Only Airbus will produce since it knows that the subsidy would not be sufficiently large to entice Boeing to also enter the market.
You might also like to view...
You value your economics textbook at $40. Someone else values it at $30, but that person is willing to pay you $35 for your textbook. Would selling your textbook to this person for $35 be Pareto efficient?
A. Yes, because you received the maximum amount the other person would have been willing to pay for the textbook. B. Yes, because both of you are better off as a result of the trade. C. No, because even though he was willing to pay more for the book than he valued it at, you would not receive as much as you value it at, so you would be made worse off. D. Yes, the person paid you $35 for the book so his net benefit was -$5, whereas your net benefit was also -$5. This exchange is Pareto efficient because each of you have the same net benefit.
If productivity increases as wages increase and firms pay a wage above the market clearing wage, then
A. these firms will go out of business in the long run because they will not be able to compete with firms paying lower wages. B. these firms will have lower profit levels than their competitors. C. these firms will face an excess demand for labor and will be able to hire the best workers in the market. D. a potential benefit these firms may receive is a reduction in employee turnover.
A decrease in consumption will result in
A) both total utility and marginal utility decreasing. B) total utility increasing, but marginal utility decreasing. C) total utility decreasing, but marginal utility increasing. D) both total utility and marginal utility increasing.
Marginal utility measures:
A) the slope of the indifference curve. B) the additional satisfaction from consuming one more unit of a good. C) the slope of the budget line. D) the marginal rate of substitution. E) none of the above