Refer to Figure 4-18. As a result of the tax, is there a loss in producer surplus?
A) No, because the consumer pays the tax.
B) Yes, because producers are not selling as many units now.
C) No, because the market reaches a new equilibrium
D) No, because producers are able to raise the price to cover their tax burden.
B
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Which of the following is not a cost posed by inflation?
A) Firms must pay for changing prices on products and printing new catalogs. B) The money that consumers and firms hold loses its purchasing power. C) Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation. D) Inflation reduces the affordability of goods and services to the average consumer.
Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of berries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. How much of each good can be produced if each worker fully specializes according to comparative advantage?
A. 1,600 fish and 8,000 pounds of berries B. 1,600 fish and 4,800 pounds of berries C. 3,600 fish and 12,800 pounds of berries D. 2,000 fish and 8,000 pounds of berries
If the cost of living is higher in richer cities than in poorer cities, and the nominal minimum wage is the same in every city, then the real purchasing power of the minimum wage would necessarily be
A. independent of the cost of living in any city. B. higher in the poorer cities. C. higher in the richer cities. D. lower in the poorer cities.
The short-run supply curve for the perfectly competitive firm is the portion of its
A) MC curve above the AVC curve. B) MC curve above the AFC curve. C) MC curve above the ATC curve. D) MC curve above the MR curve.