On account of a massive construction boom in a country, the demand for iron ore increases substantially. This causes iron ore prices to escalate. Producers increase iron ore mining considerably in the short run, in spite of knowing that this will adversely affect future availability of ore. Which of the following is most similar to the scenario described above?
a. Corn producers hoard their supplies in order to induce a price hike.
b. Petroleum manufacturers increase extraction in response to sky-rocketing fuel prices.
c. The government of a country makes aforestation mandatory for lumber firms.
d. Impressive revenue generation induces the government of a country to impose additional fuel surcharge.
e. To discourage smoking, the government of a country increases sales tax on cigarettes.
b
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Larry Krovitz is a salesman who works at a used-car showroom in Sydney, Australia. It's the last week of July but he is yet to meet his sales target for the month. A customer, Harold Kumar, who wants to buy a Ford Fiesta, walks in to the showroom
After taking one of the cars for a test drive, Harold decides to buy it. While $11,000 was the least that Larry would have been willing to accept for that car, he quotes a price of $15,000 . After some bargaining, the car is sold for $12,000 . a. What is the producer surplus in this case? b. If Larry bought the car for $8,000, what is his profit? c. Is producer surplus always equal to profit? Explain your answer.
Under the gold standard, ________ if the country's overall balance of payments remained in balance.
A. gold would enter the country B. gold would leave the country C. no gold would enter or leave the country D. Both A and B are correct.