Producer surplus measures the value between the actual selling price and the profit-maximization price
a. True
b. False
Indicate whether the statement is true or false
False
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A perfectly competitive firm's economic profit is maximized by producing the amount of output such that
A) total revenue equals total variable cost. B) marginal revenue equals marginal cost. C) total revenue equals total cost. D) marginal revenue is equal to total revenue.
If the supply curve for orange juice is estimated to be Q = 40 + 2p, then, at a price of $2, the price elasticity of supply is
A) .01. B) .09. C) 1. D) 11.
Suppose the plant owners design an incentive scheme for the plant manager in which the feasible production level is set equal to output from the previous quarter. The bonus payment is determined by the formula B = 0.2Qf + 0.2(Q - Qf)
What potential problems can arise with this scheme? A) If Qf is unusually large, then the manager has little incentive to work hard during the following quarter because Q will likely fall back below Qf. B) If Qf is unusually small, then the manager will receive a small bonus regardless of their efforts during the current quarter. C) The manager has an incentive to underperform and generate a small Q during the current quarter in order to provide a smaller benchmark for performance in the next quarter. D) The incentive scheme only depends on current output and does not measure performance relative to feasible production.
Refer to the following nonlinear model which relates W to P, Q, and R:W = aPbQcRdThe computer output form the regression analysis is: 
Based on the info above, if Q increases by 8% (all other things constant), W will
A. increase by 99.2%. B. increase by 0.99%. C. decrease by 12.5%. D. decrease by 99.2%.