Curly told Larry about his new business venture: Curly pays Acme International $1,000 per month for supplies, works out of his apartment on his own computer and earns a monthly revenue of $1,500. Should Larry quit his job and do what Curly is doing?
A. Yes, as long as Larry has at least $1,000 in savings to get started.
B. Not if Larry is earning more than $500 per month at his current job.
C. Yes, as long as Larry can work out if his apartment and owns a computer.
D. Not unless Larry can borrow the $1,000 monthly payment at no interest.
Answer: B
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Refer to Table 4-12. The equations above describe the demand and supply for Bubba's Fried Jellybeans. The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units. What is the value of producer surplus?
A) $5 thousand B) $12.5 thousand C) $25 thousand D) $37.5 thousand
Government regulators know that pollution is a problem in Cleveland. However, information on the social cost of this externality is difficult to come by
Which of the following statements best describes how this information problem might manifest itself? a. Well-intentioned regulators monitor a handful of polluting factors and are unable to determine how much they contribute to the problem. b. Well-intentioned regulators decide to shut down the plants and start government production in state-of-the-art factories. c. Well-intentioned regulators impose a collective tax that ends up reducing output beyond the optimal level of output. d. Well-intentioned regulators fail to do anything because they are afraid of doing the wrong thing.