The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is
A) $10 million.
B) $20 million.
C) $60 million.
D) zero.
B
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Suppose that the labor movement has a revival in the US and the majority of workers join labor unions. As a result you would expect
A) the unemployment rate to rise. B) the unemployment rate to fall. C) the aggregate demand curve to shift rightward.
If you dump trash in a vacant lot despite regulations against it, then you are
A) saving landfill space and creating a social benefit. B) acting rationally and generating a positive externality. C) avoiding the private costs associated with disposing your trash some other way and creating a social cost. D) acting economically irrational and creating a social cost.
The above figure shows the apartment rental market in Bigtown. If severe flooding resulted in the destruction of many of the city's apartment buildings, then the
A) supply curve of apartments would shift leftward and rent would rise above $750.00. B) demand curve for apartments would shift rightward and rent would rise above $750.00. C) equilibrium quantity of apartments rented would increase beyond 3,000. D) equilibrium market price of apartments rented would fall below $750.00.
Suppose that the federal government grants a 50 cent per gallon subsidy to buyers of gasoline and that the demand for gasoline is highly inelastic while the supply is highly elastic. Under these circumstances, the benefit of the subsidy
a. will go primarily to producers. b. will go primarily to consumers. c. will be split equally between consumers and producers. d. cannot be determined because the actual benefit of a subsidy is not influenced by the elasticities of supply and demand.