If the government imposes a binding price floor in a market, then the consumer surplus in that market will increase
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose Canon Inc decided to invest 45 billion yen in developing and launching a new model of its digital camera, expecting that it will bring additional sales of 60 billion yen
The company has already invested 38 billion yen when the marketing department suddenly finds out that the introduction of a similar camera by Sony will reduce Canon's expected additional sales to 30 billion yen. The company's management is trying to decide whether to continue investing in the new product or close the project. Canon hires you as an economic consultant. So, think like an economist to help the company's management make their decision: a) At this point in time, what is Canon's marginal cost of introducing the new product? b) What is Canon's marginal benefit from introducing the new product? c) Will you advise Canon to finish the project and introduce the new product? Why or why not? What principles of economic thinking will help you analyze the situation and make the right choice?
Why does the Fed have imperfect control over the money supply over short periods?
a. Because of unpredictable changes in reserve requirements b. Because the public responds to open market operations in unpredictable fashions c. Because the Fed does not know how much reserves will change when it buys or sells securities d. Because of unpredictable changes in public desire to hold cash and banks' desires to hold reserves
Libertarianism identifies a redistribution of income role for government when
a. the utility of the worst-off could be improved. b. the income distribution is altered by illegal means (e.g. theft). c. the total utility for society can be improved through redistribution of income. d. a "veil of ignorance" would result in a recommendation of redistribution of income.
Espresso Yourself Coffee Shop hires workers in a competitive labor market to make coffee. The ingredients required to make each cup of coffee cost 50 cents. The coffee shop's hourly output of coffee varies with the number of workers hired, as shown in the table. Each cup of coffee sells for $2.00.Number ofworkersCoffee(cups/hour)00125245360470575 The marginal product of the third worker is ________ than the marginal product of the second worker, implying that ________.
A. greater; diminishing returns are absent B. neither greater nor less; the third worker will be hired C. less; the third worker will never be hired D. less; diminishing returns are present