Jim is haggling with a car dealer over the sale price of a used car. Which of the following would determine the amount of surplus Jim extracts from the purchase?
a. Total difference between the buyer's and seller's valuations of the car
b. The number of customers trying to buy that particular car
c. The number of sellers trying to make Jim a sale
d. All of the above
d
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In a world of perfect certainty, sharecropping would be less efficient than a farm owner working his own farm because
(a) sharecroppers receive only half of their marginal product. (b) paying a worker a wage gives him or her an incentive to shirk. (c) sharecroppers are exploited by landlords. (d) renting farmland concentrates risk on the renters. (e) all of the above.
The long-run aggregate supply curve (LRAS) is: a. a vertical curve that relates the level of real GDP produced to the price level in the long run
b. an upward sloping curve that relates the level of real GDP produced to the price level in the long run. c. an infinite curve that relates the level of real GDP produced to the price level in the long run. d. none of the above are true.
The difference between the maximum amount consumers are willing and able to pay for each unit of a good and the amount consumers actually do pay is called:
a. consumer surplus. b. marginal benefit. c. marginal cost. d. productive efficiency.
Homer earns $10,000 per year. Each year he spends $5,000 and saves $5,000. He pays a 5 percent sales tax on all of his spending. Assuming the sales tax is the only tax he pays, his average tax rate out of his income is
A. 3.5 percent. B. 2.5 percent. C. 0 percent. D. 5.0 percent.