Suppose Bianca buys a used a textbook from Sebastian for $55. If Bianca's surplus from this transaction was $10, we can infer that:
A. Bianca's reservation price was $45.
B. Sebastian's reservation price was $45.
C. Bianca's reservation price was $60, and Sebastian's reservation price was $50.
D. Bianca's reservation price was $65.
Answer: D
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Job rationing occurs if
A) the Lucas wedge is positive. B) the minimum wage is set below the equilibrium wage rate. C) an efficiency wage is set below the equilibrium wage rate. D) the real wage rate is pushed above the equilibrium wage rate. E) a union wage is set below the equilibrium wage rate.
If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the consumer surplus will be
A) $0. B) $8 million. C) $16 million. D) $32 million.
The marginal cost of a monopolist is constant and is $10. The demand curve and marginal revenue curves are given as follows:
demand: Q = 100 - P marginal revenue: MR = 100 - 2Q The deadweight loss from monopoly power is ________. A) $1000.00 B) $1012.50 C) $1025.00 D) $1037.50 E) none of the above
Most entrepreneurs do not have enough money of their own to start their businesses. When they acquire the necessary funds from someone else,
a. their consumption expenditures are being financed by someone else's saving. b. their consumption expenditures are being financed by someone else's investment. c. their investments are being financed by someone else's saving. d. their saving is being financed by someone else's investment.