Suppose a man and a woman are in love and care for the other's happiness as well as their own consumption. Suppose the woman is more selfish than the woman UM = CM1/2 UW1/2 UW = CW2/3 UM1/3 They will maximize the joint happiness (UM + UW) where
a. CM = 100; CW = 0
b. CW = 100; CM = 100
c. 50 < CM < 100; 0 < CW < 50
d. 50 < CW < 100; 0 < CM < 50
d
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A necessity (such as food and shelter) generally has an inelastic demand
Indicate whether the statement is true or false
Refer to Figure 9-8. Suppose the U.S. government imposes a $0.25 per pound tariff on rice imports. Figure 9-8 shows the demand and supply curves for rice and the impact of this tariff. Use the figure to answer questions a-i
a. Following the imposition of the tariff, what is the price that domestic consumers must now pay and what is the quantity purchased? b. Calculate the value of consumer surplus with the tariff in place. c. What is the quantity supplied by domestic rice growers with the tariff in place? d. Calculate the value of producer surplus received by U.S. rice growers with the tariff in place. e. What is the quantity of rice imported with the tariff in place? f. What is the amount of tariff revenue collected by the government? g. The tariff has reduced consumer surplus. Calculate the loss in consumer surplus due to the tariff. h. What portion of the consumer surplus loss is redistributed to domestic producers? To the government? i. Calculate the deadweight loss due to the tariff.
The ABC Company manufactures routers that are used to provide high-speed Internet service. ABC sells an average of 1,000 routers each month, but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month
Therefore A) ABC will soon go out of business. B) to reach minimum efficient scale ABC would have to sell at least 3,000 routers each month. C) ABC is experiencing diminishing returns. D) ABC is experiencing diseconomies of scale.
Refer to Scenario 17.5. The owners can't know whether the workers are exerting high or low effort if income is
A) $5000. B) $7000. C) above $7000. D) $13,000. E) above $13,000.