China currently has a policy to subsidize grain production to keep farmers' income up. It sets a target price for the state purchase of the grains. Currently the price is higher than the world price. China's policy has led to:
a. Increases in the domestic stocks of grain
b. Decreases in the state purchases of grain
c. Shortages of grain in China
d. Reduction of imported grain for the use in livestock feed
e. a and d
a. Increases in the domestic stocks of grain
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The figure above shows the labor market in a small town. If the government imposes ________ that firms must at least pay, the effect will be ________ because ________
A) a minimum wage of $10; an increase in unemployment; a surplus of labor is created B) a minimum wage of $10; no change in unemployment; it will not affect how firms demand labor C) a minimum wage of $10; a decrease in unemployment; a shortage of labor is created D) an efficiency wage of $10; an increase in unemployment; a shortage of labor is created E) an efficiency wage of $10; a decrease in unemployment; a surplus of labor is created
Social surplus is maximized in a(n) ________
A) perfectly competitive market B) monopolistically competitive market C) monopoly market D) oligopoly market
During an economic slump such as the 2008 recession, what pricing strategies could a fast-food chain such as McDonald's use to maintain its sales? Use some of the concepts discussed in this chapter in your answer
What will be an ideal response?
Refer to Figure 4-20. The figure above represents demand and supply in the market for gasoline. Use the diagram to answer the following questions
a. How much is the government tax on each gallon of gasoline? b. What portion of the per-unit tax is paid by consumers? c. What portion of the per-unit tax is paid by producers? d. What is the quantity sold after the imposition of the tax? e. What is the after-tax revenue per gallon received by producers? f. What is the total tax revenue collected by the government? g. What is the value of the excess burden of the tax? h. Is this gasoline tax efficient?