Allen tutors in his spare time for extra income. Buyers of his service are willing to pay $40 per hour for as many hours Allen is willing to tutor. On a particular day, he is willing to tutor the first hour for $10, the second hour for $18, the third hour for $28, and the fourth hour for $40 . Assume Allen is rational in deciding how many hours to tutor. His producer surplus is
a. $40.
b. $64.
c. $12.
d. $56.
b
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Why is economic development a contentious subject? Use one of the controversies mentioned in the chapter to illustrate why people may not agree on the answers
What will be an ideal response?
Consider the statement: "When the British government tripled university fees for foreign students in Great Britain, about one-half of them left to study in other countries." The implied price elasticity of demand by foreigners for a British education is (in absolute value)
A. less than 1. B. equal to 1. C. greater than 1.5. D. between 1.0 and 1.5.
If the firm shown in the table changes the quantity it produces from 2 to 4, what would be the change in profit?
a. -1
b. 0
c. 1
d. 2
Which one of the following is an example of discretionary fiscal policy used to correct an inflationary gap?
A. an agreement among major banks to lower interest rates B. decrease in the money supply by the Federal Reserve C. an increase in government expenditures approved by Congress D. a tax increase passed into law by Congress