Suppose Sam buys a good for $100 at a yard sale. If consumer surplus from the sale is $75, Sam would have been willing to pay:
A. $100.
B. $175.
C. $25.
D. equal to the deadweight loss.
Answer: B
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Refer to the accompanying figure.
Based on the figure, when PAE = 200 + 0.5Y, short-run equilibrium output equals:
A. 800. B. 400. C. 600. D. 1,200.
one of the four main categories of spending identified by John Maynard Keynes is net exports
a. true b. false
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.
Sulfur Dioxide Discharged (Tons)Firm AFirm B10$10,000$12,000911,00017,000813,00022,000716,00026,000620,00033,000
Table 9.8 shows the production cost for two utilities at different levels of sulfur dioxide emissions. Assume that the government issued 8 marketable pollution permits to each firm. If Firm A contemplates selling one permit to Firm B, what is Firm A's willingness to accept?
A. $2,000 B. $3,000 C. $4,000 D. $5,000