Suppose that producers are richer than consumers. Is a price support program fair? Explain your answer
What will be an ideal response?
A price support program is unfair. It is unfair under the fair rules approach to fairness because a price support prevents voluntary exchange. And, if producers are richer than consumers, it is unfair under a fair results approach because the price support further enriches the (already rich) producers while decreasing the income of the (already poor) consumers. So in this case a price support redistributes income from the poor to the rich.
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Suppose bad weather in Florida unexpectedly results in a much smaller citrus crop than had been projected. This would tend to cause the labor supply curve for citrus pickers to
A) shift to the left, causing the labor demand curve to shift to the left. B) remain unchanged, and the wage rate would tend to increase. C) shift to the right, causing the labor demand curve to shift to the right. D) remain unchanged, and the wage rate would tend to decrease.
An inferior good exhibits
A) a negative income elasticity. B) a downward sloping Engel curve. C) a decline in the quantity demanded as income rises. D) All of the above.
According to the Net Present Value (NPV) rule, managers choose to invest if
a. The NPV of the project is less than zero b. The NPV of the project is greater than zero c. The NPV of the project is equal to zero d. The NPV of the project is equal to the cost of capital
If total product is rising as more workers are hired, MPP must be positive
Indicate whether the statement is true or false