Suppose Jones sells a good for $100 at a yard sale. If the producer surplus from the sale is $75, Jones's cost of the good must have been:
A. $100.
B. $175.
C. $25.
D. equal to the deadweight loss.
Answer: C
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Keynes and many of his contemporaries believed that money was
a. major importance because the idea of the liquidity trap only came later. b. even more important than fiscal policy. c. little importance and monetary policy of little use as a stabilization tool. d. major importance but of little use as a stabilization tool. e. none of the above.
Explain why taxes on pollutants reduce pollution while subsidies to firms cutting their pollutants actually increase pollution.
What will be an ideal response?
The total fixed cost remains constant as which of the following varies (as depicted on the x-axis of the relevant graph)?
A. cost of resources B. time C. output in a given period of time D. profit
Consider a Cournot oligopoly consisting of four identical firms producing good X. If the firms produce good X at a marginal cost of $7 per unit and the market elasticity of demand is ?2, determine the profit-maximizing price.
A. $12 per unit B. $6 per unit C. $8 per unit D. $10 per unit