Use the figure below to answer the following question.
If the output level is Q2, then producer surplus is
A. ac0.
B. bce.
C. 0eQ1.
D. 0ecd.
Answer: D
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Use a supply and demand graph to explain why the rent on land is demand determined
What will be an ideal response?
According to Tobin's q theory, if q is ________, new plant and equipment capital is ________ relative to the market value of business firms, so companies can buy a lot of new investment goods with only a ________ issue of stock
A) high; dear; large B) high; cheap; large C) high; cheap; small D) low; cheap; large E) low; cheap; small
A recessionary gap exists when potential GDP
a. falls short of equilibrium GDP. b. exceeds equilibrium GDP. c. equals equilibrium GDP. d. All of the above are correct.
Suppose that the labor market for life guards is initially in equilibrium. Then the marginal productivity of life guards increases. What happens to the equilibrium wage and quantity of life guards?
a. Both the equilibrium wage and quantity increase. b. Both the equilibrium wage and quantity decrease. c. The equilibrium wage increases, and the equilibrium quantity decreases. d. The equilibrium wage decreases, and the equilibrium quantity increases.