Yvone is debating whether to take a job as a professional therapist or a florist. She will earn $40,000 a year as a therapist or $25,000 a year as a florist. If Yvone chooses to be a therapist, the economic rent is
A. $40,000.
B. $15,000.
C. $25,000.
D. unable to determine.
Answer: B
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The part of consumption that does not depend upon the level of disposable income is
A) autonomous consumption. B) savings. C) average propensity to consume. D) saving.
The difference between the monetarist and Keynesian views on discretionary monetary policy is that the monetarists
a. believe monetary policy is a stabilizing force and Keynesians believe it is primarily destabilizing. b. Keynesians think that monetary policy is always used effectively. c. believe monetary policy is a destabilizing force and Keynesians believe it is potentially stabilizing. d. favor "fine tuning" the economy by use of monetary policy while the Keynesians do not.
The presence of pollution in the dry cleaning industry leads in the long run to dynamic inefficiencies because
A) people will buy fewer clothes that need dry cleaning than they otherwise would have. B) people will develop substitutes for dry cleaning that are wasteful. C) firms will be induced to leave the industry because of artificially high costs. D) firms whose average private cost is less than price will stay in (or enter) the dry cleaning industry even though their average social cost exceeds price. E) firms whose average private cost exceeds the price will exit (or fail to enter) the dry cleaning industry even though their average social cost is less than price.
Refer to the above figure. If a price floor of $3 was set
A) the quantity sold would be 80 units. B) there would be a surplus of 40 units. C) there would be a shortage of 40 units. D) there would be a shortage of 20 units.