Use the figure below to answer the following question.
At equilibrium, producer surplus is
A. 300.
B. 150.
C. 200.
D. 400.
Answer: B
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Vertical equity incorporates the notion that
A. those earning higher incomes should pay more in taxes. B. those earning equal incomes should pay the same in taxes. C. taxes paid should be unassociated with income levels. D. there should be no excess burden created by a tax.
Refer to the figure below:
If the price is $16, the resulting
A. surplus will lead to a rise in price. B. shortage will lead to a fall in price. C. surplus will lead to a fall in price. D. shortage will lead to a rise in price.
Contrast the sticky wage theory with the sticky price (menu cost) theory in a situation where the overall price level increases.
a. Under the sticky wage theory, producers expand production and sales because of higher profit margins, whereas under the sticky price theory, producers find their sales increasing because their prices are relatively lower. b. Under the sticky wage theory, producers find their sales increasing because their prices are relatively lower, whereas under the sticky price theory, producers expand production and sales because of lower profit margins. c. Under the sticky wage theory, producers reduce production and sales because of higher profit margins, whereas under the sticky price theory, producers find their sales decreasing because their prices are relatively lower. d. Under the sticky wage theory, producers find their sales decreasing because their prices are relatively lower, whereas under the sticky price theory, producers decrease production and sales because of higher profit margins.
A cartel is
What will be an ideal response?