The difference between current market price and full costs of production for the firm is known as
A. producer surplus.
B. consumer surplus.
C. nonprice surplus.
D. market surplus.
Answer: A
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Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas
Hotels are a capital good that,once built, will help produce still more consumption goods. If Puerto Rico produces more hotels than Hawaii, A) Hawaii's PPF will shift outward further than Puerto Rico's PPF. B) Hawaii's PPF will shift inward. C) Puerto Rico's PPF will not shift. D) Puerto Rico's PPF will shift outward further than Hawaii's PPF. E) Puerto Rico's and Hawaii's PPF will shift outward by the same amount.
If a country's population increases while the supply of farmland is fixed, then farmland prices will most likely
a. decrease because people spend more money on food and have less to spend on rent b. increase because the marginal revenue product of food decreases c. decrease because farmers must cultivate less productive foods such as potatoes d. increase because the marginal revenue product of land increases e. stay the same because there is no relation between farm land prices and population
The opportunity cost of attending college
A) consists of the tuition costs only. B) consists of the tuition costs plus the costs of room and board and other expenses. C) is zero, if the student receives a scholarship that covers the costs of tuition, room and board, and other expenses. D) varies from person to person. E) both b and c
Megabucks and CashCow are the only two firms in a market. Each firm must decide whether to price high or price low. The payoffs from each strategy combination are shown to the right long dash in millions of dollars
The frist number in each pair is Megabucks' profit; the second is CashCow's profit.
If the firms cooperate, the strategy that Megabucks will choose is __________, and the strategy that CashCow will choose is __________.
If the firms behave opportunistically, the strategy that Megabucks will choose is __________, and the strategy that CashCow will choose is __________.