Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below.
With no subsidy, what is producer surplus?
A. $0 per day
B. $1,000 per day
C. $8,000 per day
D. $4,000 per day
Answer: A
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Which of the following pairs of market types are both characterized by having a large number of firms?
A) monopoly and oligopoly B) monopoly and monopolistic competition C) perfect competition and oligopoly D) perfect competition and monopolistic competition
The downward slope of the production possibilities curve illustrates the:
A. Cost-Benefit Principle. B. Incentive Principle. C. Scarcity Principle. D. Principle of Comparative Advantage.
Which of the following can a positive analysis accomplish?
a. It can tell an advertising executive what type of ads she ought to order. b. It can tell us how much the demand for a product will increase. c. It can tell us if one policy is better than another. d. It can tell a policy maker what is the best course of action.
Economics is the study of how people:
A. vote for political leaders. B. make choices to produce and consume goods and services. C. establish social institutions that maximize well-being. D. develop value systems.