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.
c
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Suppose the market-clearing interest rate on loans is 12%, but law-makers impose an 8% interest rate ceiling. The new law will tend to
A) increase the supply of loans. B) decrease the supply of loans. C) increase the demand for loans. D) decrease the demand for loans. E) do none of the above.
Refer to Figure 4-8. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments. What is the value of the deadweight loss after the imposition of the price floor?
A) $50,000 B) $125,000 C) $175,000 D) $260,000
When future labor income falls in a large open economy, it causes the current account to ________ and investment to ________
A) fall; rise B) rise; remain unchanged C) fall; fall D) rise; rise
Other things constant, which of the following will most likely cause the dollar to appreciate on the exchange rate market?
a. higher interest rates in the United States b. a relatively low rate of inflation in the United States c. high rates of income growth in Europe d. all of the above