A singer would willingly perform in a concert for $10,000. If she is paid $25,000 for the concert, she is
A) receiving $25,000 to cover her opportunity cost.
B) not being paid her full opportunity cost.
C) receiving $15,000 of economic rent.
D) certainly being paid more than warranted by the level of demand.
Answer: C
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The table above shows output and costs of Evan's Subs, a typical perfectly competitive firm in a local market for sandwiches. Evan's fixed cost is $9 per hour. The current market price of a sandwich is $6
If the market price does not change, Evan's will A) continue to operate in the short run, but will exit the industry in the long run. B) continue to operate in the short run and in the long run. C) shut down. D) increase its production in the long run.
Which of the following is true of earnings from land?
a. An increase in economic rent leads to an increase in the supply of land. b. A decrease in transfer earnings from land leads to an increase in its demand. c. An increase in economic rent does not lead to an increase in the supply of land. d. A decrease in transfer earnings from land leads to a decrease in its supply. e. An increase in economic rent raises the elasticity of supply of land.