In many cities, the price of summer pops concerts has risen. In Charlotte, North Carolina, and Columbus, Ohio, for example, concerts that were once free now cost $5 . If there are only fixed costs and no variable costs nor marginal costs in an orchestra concert, what is the efficient price? Explain the reason why some people will find the efficient price unfair
If MC = 0, then the performances should be at a zero price, since P = MC is part of the criteria for efficiency. But then fixed costs will have to be paid from other sources, such as general taxes. Some believe that those who use the service should pay for it, so charging those most willing to pay appears fairer to them.
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The Obama stimulus plan's requirement that projects be "shovel-ready" was designed to combat
A. The political business cycle. B. The administrative lag. C. The recognition lag. D. The operational lag.
To maximize its profit, the firm in the figure above produces ________ cans per day and ________
A) 0; incurs an economic loss of less than $20 B) between 3 to 5 cans; earns a normal profit C) 10; earns an economic profit of $2.90 D) 10; earns an economic profit of $29 E) more than 10; earns an economic profit
If the demand for a good is determined to be "inelastic," then the elasticity measure
A) is greater than 1.0. B) is equal to 1.0. C) is less than 1.0. D) is infinite.
Sometimes unions can raise wages above what productivity increases would permit. When this happens, we can be sure that
A) the employment of union workers is increasing. B) some union workers end up losing their jobs. C) there is a redistribution of income from union workers to nonunion workers. D) featherbedding will occur.