You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss called, and she is looking for someone to cover a shift on Saturday at the same time as the concert. You would have to work 4 hours and she would pay you $11/hr. The psychic cost to you of working is $2/hr. Your economic surplus from going to work instead of seeing SPAM on Saturday is:
A. $1
B. $36
C. $35
D. $0
Answer: A
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If the firm in Figure 17-4 above maintains its set price of P0, rather than dropping price to P1, the welfare loss to society due to this decision is
A) J + K. B) K - G. C) G + H. D) H + K. E) F + G + H.
For a lender in a (c,c') graph, the optimal consumption bundle is
A) to the left of the endowment point. B) to the right of the endowment point. C) on the endowment point. D) dependent on other factors.
Which of the following methods was NOT used to help the North finance the Civil War (1861–1865)?
(a) Selling large amounts of bonds (b) Issuing fiat Federal paper money (c) Raising taxes (d) Selling confiscated property
Each citizen in a small town suffers 5 units of irritation for each bushel of leaves burned in the town. The charge for hauling a bushel of leaves to the land fill is a fee equal to 20 units of irritation. There are 25 people in the town, each of whom minimizes personal irritation and has 10 bushels of leaves. In this problem we change several of the assumptions used so far. Individuals now vary in their distaste for carrying leaves to the land-fill. Also, the first 100 bushels burned do not create a problem for anyone because the air could dissipate the smoke without harm. However, after the first 100 bushels the problem sets in as described earlier. How could efficiency be reached under these new circumstances?
What will be an ideal response?