If the price a buyer pays for a good is $50 and the maximum price she would be willing and able to pay is $53, then ____________ is _______________
A) producers' surplus; $103
B) consumers' surplus; $103
C) consumers' surplus; $3
D) producers' surplus; $3
E) consumers' surplus; $40
C
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As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to
A) fairness according to the "fair rules" approach. B) efficient markets. C) resources being allocated according to a command system. D) a smaller total output. E) lower taxes on the rich than on the poor so that the rich do not lose their incentive to work.
Much of the nation's coal is extracted by strip mining. This process leaves a huge barren hole in the ground when complete, and the cost of replanting the trees is approximately $10 per ton of coal. Burning the coal for electricity causes air pollution. No one knows how much damage the air pollution causes, but we know that for another $10 per ton the power plant can be outfitted with a pollution
control device. What is one measure of the true social cost of coal fired electricity, in dollars per ton? a. Private marginal cost plus the $10 replanting charge. b. Private marginal cost plus the $10 emission control charge. c. Only the $20 of replanting and emission control charges, because the other costs are private, not social. d. Private marginal cost plus the $20 of replanting and emission control charges. e. In order to answer this question we need to know the dollar value of the pollution.
Measuring important concepts in economics is difficult and some important economic phenomena are still beyond the understanding of economists. Thus economics is called a(n):
a. complex science. b. social science. c. inexact science. d. hard science.
Which of following is NOT true of the equilibrium price?
A. It measures the value of the last unit sold to consumers. B. Buyers who are willing to pay the equilibrium price can acquire the good. C. Sellers who are willing to accept the equilibrium price can sell what they produce. D. It is fair in the sense that everyone can afford basic goods and services.