When is the profit a firm earns equal to the producer surplus? Explain
What will be an ideal response?
Profit equals producer surplus when the firm has no fixed costs. Producer surplus can be thought of as the gains from trade. In the short run, if the firm produces any output, it earns profit equal to revenue minus variable costs minus fixed costs. If the firm shuts down, it loses the fixed costs. The producer surplus equals the profit from trading minus the profit or loss from not trading, revenue minus variable costs. If no fixed costs exist, then profit will equal the producer surplus.
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Refer to Scenario 2. By examining the t-statistics associated with the regression coefficients, at the 5 percent significance level, which of the two independent variables are statistically different from zero?
What will be an ideal response?
If the federal funds rate is above the equilibrium federal funds rate, then the supply of reserves would be __________ than the demand for reserves and the banks would try to __________ reserves causing the federal funds rate to fall
A) greater than; lend B) greater than; borrow C) less than; lend D) less than; borrow
Statistical discrimination is when you take action to:
A. reveal private information about someone else. B. reveal one's own private information. C. find out the opportunity cost of acquiring more information. D. fill gaps in your information by generalizing based on observable characteristics.
If the demand for a life-saving drug was perfectly inelastic and the price doubled, the quantity demanded would
A) also double. B) decrease by 50%. C) be cut in half. D) remain constant.