The above figure shows the U.S. market for replacement cell phone batteries. Area A + area E is the
A) consumer surplus when there is a tariff.
B) producer surplus when there is a tariff.
C) tariff revenue.
D) increase in producer surplus due to the tariff.
E) gain in total surplus due to the tariff.
B
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The production possibilities curve illustrates the basic principle that:
A. the production of more of any one good will in time require smaller and smaller sacrifices of other goods. B. an economy will automatically obtain full employment of its resources. C. if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced. D. an economy's capacity to produce increases in proportion to its population size.
Which of the following is a common mistake managers make?
A. Maximizing the value of the firm instead of maximizing the firm's profits. B. Increasing the rate of production in order to reduce unit costs of production. C. Treating implicit opportunity costs as part of the total costs of using resources. D. Using marginal analysis to make output decisions. E. all of the above.