In this consumer surplus graph, what is the maximum amount Emily is willing to pay for a third glass of iced tea?
a. four dollars
b. three dollars
c. one dollar
d. fifty cents
d. fifty cents
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Refer to Figure 9-3. What is the value of domestic producer surplus after the imposition of a quota?
A) $10.75 million B) $15.75 million C) $17.25 million D) $27.75 million
An improvement in technology would
a. enable the economy to produce outside its original production possibilities frontier b. enable the economy to move along its original production possibilities frontier c. eliminate scarcity; therefore, the production possibilities frontier would no longer exist d. have no effect on the production possibilities frontier e. change the production possibilities frontier to a line with a positive slope
Investment in both physical and human capital tends to enhance economic growth because it generally
a. increases consumption during the current period. b. makes it possible for individuals to produce more goods and services per hour worked. c. encourages firms to expand output by employing more low productivity workers. d. encourages workers to unionize and thereby fight for higher wages.
Why are people willing to pay more for a diamond than for a bottle of water?
What will be an ideal response?