Assume the graph shown represents Kerri's budget constraint. If Kerri's income to spend on these two items increased, which of the following would be true?
A. Kerri's budget constraint would shift in, maintaining the same slope.
B. Kerri's budget constraint would shift out, and get flatter.
C. Kerri's budget constraint would shift out, and get steeper.
D. Kerri's budget constraint would shift out, maintaining the same slope.
Answer: D
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Consider an income tax and a head tax, the sizes of which have been set so that the government collects the same amount of money under each tax. Which tax does the consumer prefer?
a. The consumer is indifferent between the two taxes, since he pays the same amount of money under each tax.
b. The consumer prefers the head tax, because it does not lower the relative wage as does the income tax.
c. The consumer prefers the income tax, because it can be avoided by increasing the amount of leisure time consumed.
d. The consumer may prefer either tax, depending on whether the income tax increases or decreases the number of hours of work at the optimum.
Refer to Scenario 9.1. The socially optimal outcome occurs when Sheb places ________ sheep on the commons and Monty places ________ sheep on the commons
A) 4; 4 B) 4; 5 C) 5; 4 D) 5; 5
Dumping is defined as the situation in which
A) foreign producers sell a product at a price below the cost of production. B) domestic producers are protected by tariffs. C) domestic producers sell a product at prices below the cost of production. D) foreign producers sell a product at a price above a fair level. E) domestic producers cut production to drive up domestic prices.
Given the scenario described, if the market price of hammers increased from $8 to $12, producer surplus would:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. A. increase from $8 to $12. B. increase by $4 for each producer. C. increase by $4 for House Depot. D. increase by $7 in total.