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Question
Figure 9.5
Refer to Figure 9.5. If the government establishes a price floor of $2.50 and farmers grow only the amount of berries that will be sold, producer surplus will
A) fall by $50.
B) fall by $100.
C) remain the same.
D) rise by $50.
E) rise by $100.
Answer
This answer is hidden. It contains 1 characters.
Related questions
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The Clemson Manufacturing Corp. engineers have estimated that a new factory can be constructed for the manufacture of hydraulic valves and fittings. Two different technologies, A and B, have been considered in the manufacturing process. The costs of the factory and annual earnings are given below for both technologies. Capital Costs Earnings (in $millions) (in $millions) End of the Year A B A B 0 $10 $15 $0 $0 1 10 10 -1 0 2 10 0 1 2 3 0 0 5 10 4 0 0 10 10 5 0 0 20 10At the end of five years, technology A will have a scrap value of one million dollars, and technology B will have a scrap value of 5 million dollars. Assume that these two projects are equally risky and the appropriate discount rate is 10 percent per year. Calculate the net present value of each of these factories. Determine if either or both would be feasible. Does it matter whether or not real or nominal terms are used for capital costs, cash flows, and discount rate? Explain.
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Your firm is evaluating a potential investment in new machinery, but the manager in charge of the project uses an opportunity cost of capital that is too large. How does this error affect the projected net present value of the firm's investment?
A) NPV is overstated
B) NPV is understated
C) NPV is unaffected
D) NPV changes from positive to negative
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For net present value calculations, the rate of return that one could earn by investing in another project with similar risk is known as the:
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B) nominal interest rate.
C) prime interest rate.
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Q:
If the inflation rate falls and nominal interest rates are unchanged,
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If an individual has $10,000 in a savings account paying 3% and the inflation rate is 2%, the nominal interest rate is
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Q:
The real interest rate is
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Q:
The first term in an NPV calculation is usually
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Q:
The "NPV Criterion" is that a firm should invest in a new capital project if
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B) the future value of the expected future cash flows is larger than the cost of the investment.
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Q:
Which of the following is NOT a factor that has contributed to declining private-sector differential between union and nonunion wages in the U.S. since 1980?
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Suppose a labor market has perfectly inelastic supply that is composed of union and non-union workers, and both groups of workers initially earn the perfectly competitive wage. What happens to the equilibrium employment level and wage for non-union workers if the union exercises its bargaining power?
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Suppose a labor market has perfectly inelastic supply that is composed of union and non-union workers, and both groups of workers initially earn the perfectly competitive wage. What happens to the equilibrium employment level and wage for union workers if the union exercises its bargaining power?
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Who does NOT earn economic rent in a competitive factor market?
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Q:
Scenario 14.4:
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TP = 100L - 0.125L2 MP = 100 - 0.25L
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L = PL -5 MEL = 2L + 5
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A) Marginal product of labor
B) Marginal revenue product of labor
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Q:
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Q:
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Under an upward sloping supply curve for land, the economic rents to land ________ as the demand for land shifts rightward.
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Q:
Which of the following is NOT true about the supply of labor to the firm in a competitive labor market?
A) It is horizontal.
B) It is perfectly elastic.
C) It is equal to the marginal expenditure curve.
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Q:
Use the following statements to answer this question:
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Q:
Scenario 14.3:Suppose that a firm's demand curve for its product is as follows: Output Price of the Good 25 9 40 8 54 7 67 6 79 5 90 4Also suppose that labor is the only variable input of production, and that the total product of labor is: Amount of Total Output Labor 2 25 3 40 4 54 5 67 6 79 7 90Refer to Scenario 14.3. What is the marginal profit from hiring the third unit of labor?A) 30B) 65C) 85D) 225E) none of the above
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Q:
The Acme Company is a perfect competitor in its input markets and its output market. Its average product of labor is 30, the marginal product of labor is 20, the price of labor is $20, and the price of the output is $5. For Acme Company, the marginal revenue product of labor
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B) is now maximizing profit.
C) should not use this factor of production because it has no potential in generating a profit.
D) can increase profit by expanding the employment of the factor of production.
Q:
An increase in technology that enhances labor productivity will likely result in:
A) a decrease in labor employment and an increase in the wage rate.
B) an increase in labor employment and an increase in the wage rate.
C) a decrease in labor employment and a decrease in the wage rate.
D) an increase in labor employment and a decrease in the wage rate.
E) employers using less labor and more capital while the wage effect is unknown.
Q:
Scenario 14.2:A firm can hire labor at the minimum wage of $4.25 per hour. Assume that labor works 8 hours a day. The firm's production function is as follows:Number of Days Number of Units of Labor of Output 0 0 1 8 2 15 3 21 4 26 5 30Refer to Scenario 14.2. What is the average product of the 4th worker?A) 4B) 5C) 6D) 6.5E) 7
Q:
If leisure is a normal good, then the income effect of a decrease in wage will
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C) decrease the number of leisure hours.
D) increase the sum of leisure plus hours worked.
Q:
The marginal revenue product can be expressed as the
A) additional revenue received from selling one more unit of product.
B) increment to revenue received from one additional unit of input hired.
C) marginal physical product of an input times the average revenue received from the sale of the product.
D) average physical product of the input times the marginal revenue received from the sale of the final product.