Refer to Excise Subsidy. After the subsidy is granted, producers' surplus equals
The following questions refer to the accompanying diagram which shows the effects of an excise subsidy given to firms. The initial price and quantity are P0 and Q0, respectively. After the subsidy is granted, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.
a. area A + B + E + H.
b. area E + H + F + I.
c. area B + C + E + H.
d. area H.
c. area B + C + E + H.
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Which of the following goods might, under the right circumstances, be substitutes for love?
A) Power B) Wealth C) Notoriety D) All of the above. E) Trick question: there are no substitutes for love.
If firms are protected by substantial barriers to entry, short-run profits can turn into long-run profits
Indicate whether the statement is true or false
Trade will take place:
A. only if the maximum that a consumer is willing and able to pay is equal to the minimum price the producer is willing and able to accept for a good. B. if the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good. C. if the maximum that a consumer is willing and able to pay is less than the minimum price the producer is willing and able to accept for a good. D. None of the statements associated with this question are correct.
Refer to Figure 12-1. If the firm is producing 200 units
A) it should increase its output to maximize profit. B) it is making a loss. C) it breaks even. D) it should cut back its output to maximize profit.