MyLab Economics with Pearson eText -- Access Card -- for Microeconomics
2nd Edition
ISBN: 9780134519517
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 6, Problem 10Q
To determine
The meaning of
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When is the profit a firm earns equal to the producer surplus? Explain
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What did Lewis mean when he wrote that there was a surplus of labor in agriculture? How does one measure that surplus? To what standard is labor in surplus, that is, in surplus relative to what?
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MyLab Economics with Pearson eText -- Access Card -- for Microeconomics
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- What is the producer surplus? What is the worker surplus? Show that a competitive market equilibrium maximizes the gains from trade.arrow_forwardI think the answer to this question is B but I am not sure, I think it could also be C. Consumer surplus in a market for a product would be equal to the area under the demand curve if A) producer surplus was equal to zero. B) marginal cost was equal to the market price. C) the product was produced in a perfectly competitive market. D) the market price was zero.arrow_forwardConsider a market for fountain pens. Suppose the ink (complement for fountain pens) becomes more expensive. What is going to happen to producer surplus on the fountain pens market? Producer surplus will increase Producer surplus will decrease Producer surplus will stay the same Change in producer surplus will be ambiguousarrow_forward
- Consider the market for a iced coffees. Each shop can make at most one drink. For shop A the marginal cost of making the coffee is $1.25, for shop B, it is $2.10, for shop C it is $3.00 and finally, for shop D it is $2.50. If the market price is P = $2.75 a. what is the quantity supplied? b. what is the total producer surplus?arrow_forwardConsider the supply and demand curves for taxi rides in the attached graph. At at price of $1.30 taxi companies earn a producer surplus of_______ million dollars.arrow_forwardConsider the supply and demand curves for taxi rides in the attached graph. At at price of $1.30 taxi companies earn a producer surplus of_____million dollars.arrow_forward
- what do you understand by consumer and prducer surplus ?what is the impact of price decrease on consumer surplus?and on producer surplus.show graphically and interpret.arrow_forwardHow does the market equilibrium define what suppliers will stay in the market and what will leave the market? Explain based on the concept of producer surplusarrow_forwardAssume competitive markets (prices are given) and that the demand is more elastic than supply. Which of the following statements is correct? A. We do not have sufficient information to infer which surplus is greater B. Consumer surplus will be larger than producer surplustyping C. Consumer surplus will be exactly the same as producer surplus D. Consumer surplus will be smaller than producer surplus. Give typing answer with explanation and conclusionarrow_forward
- Is the market for Kennedy half dollars competitive? Also why or why don't you think this market is a perfectly competitive market?arrow_forwardWhat is a market? What are the characteristics of a perfectly competitive market?arrow_forwardIf producers are willing to sell 20 cans of soda at a total price of 10 and a local restaurant offers to pay 16, then producer surplus is equal toarrow_forward
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