Briefly explain the components that make up the increase in producer surplus when there is a rise in price.
What will be an ideal response?
A rise in the price leads to an increase in quantity supplied and an increase in producer surplus. The increase in producer surplus has two parts: part of the added surplus is due to a higher price, and part is due to the expansion of output made profitable by the higher price.
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What is meant by the skill-bias technological explanation of increasing inequality?
A. Inequality has increased because technological advances over the last 40 years have complemented the productivity of unskilled labor relative to foreign labor. B. Inequality has increased because technological advances have not kept pace with the demand for education. C. There has been increasing inequality over the last 40 years among high-skilled workers. D. There has been increasing inequality over the last 40 years because unskilled workers use no technology. E. Inequality has increased because technological advances over the last 40 years have complemented the productivity of skilled labor relative to unskilled labor.
When consumption is 4,000
A. disposable income is 4,000.
B. savings is zero.
C. disposable income is equal to consumption.
D. All the choices are true.
An advertisement campaign that successfully convinces consumers to buy union-made products has the direct effect of shifting the
A) demand curve for union labor rightward. B) demand curve for union labor leftward. C) supply curve of union labor rightward. D) supply curve of union labor leftward.
A monopolist faces the inverse demand curve P = 60 - Q. It has variable costs of Q2 so that its marginal costs are 2Q, and it has fixed costs of 30
If a governmental agency imposes an $8 per unit specific tax on output, the deadweight loss from both the monopoly and the tax is A) $37.50. B) $73.00 C) $526.50. D) $562.50.