A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.
If the market price of grills is $300, given the scenario described, the total consumer surplus would be:
A. $1,070.
B. $170.
C. $200.
D. None of these is true.
B. $170.
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Which of the following statements is true about a consumer's optimal decision when indifference curves are concave?
A) Both goods are consumed. B) No goods are consumed. C) Only one of the goods is consumed. D) It occurs at the point of tangency with the budget line.
Suppose the government imposes a tax of 10 percent on the first $40,000 of income and 20 percent on all income above $40,000 . What is the average tax rate when income is $50,000?
a. 20 percent b. 15 percent c. 12 percent d. 10 percent
Brinley puts on an art show in a public space, asking for donations based on how much people enjoy his work. Economists would expect that:
a. people will understate their enjoyment of the art in order to "free ride." b. people will overstate their enjoyment of the art, attempting to substitute praise for money. c. people will accurately state their level of enjoyment and pay accordingly. d. Brinley will reap significant economic profits from the event.
Sulfur Dioxide Discharged (Tons)Firm AFirm B10$10,000$12,000911,00017,000813,00022,000716,00026,000620,00033,000Table 16.4Table 16.4 shows the production cost for two utilities at different levels of sulfur dioxide emissions. Assume that the government issued 8 marketable pollution permits to each firm. If the two firms were to voluntarily trade pollution permits, how many permits would be swapped?
A. 0 B. 1 C. 2 D. 3