Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below.
If the government provides a subsidy of $500 per ton, then producer surplus will be ________ per day.
A. $1,000
B. $8,000
C. $4,000
D. $0
Answer: D
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Institutions that accept deposits from individuals and organizations, against which depositors can write checks on demand for their market transactions and that use these deposits to make loans are called:
A) depository institutions. B) financial market institutions. C) insurance companies. D) none of the above.
If some resources used in the production of a good are only available in limited quantities, then the long run market supply curve will be perfectly elastic
a. True b. False Indicate whether the statement is true or false
Profit-maximizing firms enter a competitive market when existing firms in that market have
a. total revenues that exceed fixed costs. b. total revenues that exceed total variable costs. c. average total costs that exceed average revenue. d. average total costs less than market price.
Under the modern system of fractional reserve banking, banks
A. keep cash reserves equal to only a fraction of their deposit liabilities. B. loan out their excess reserves at interest, which is the key to their profitability. C. are always potentially vulnerable to runs. D. All of these responses are correct.