Mary Jane is willing to babysit for $6 an hour. Her neighbor has asked her to babysit for $8 an hour. Assuming Mary Jane accepts the offer:
A. her economic rent will be $2 per hour.
B. her consumer surplus will be $2 per hour.
C. her accounting profit will be $8 per hour, and her economic profit will be $0 per hour.
D. her economic profit will be $8 per hour.
Answer: A
Economics
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To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. The deadweight loss created by this tax would be greater than shown in the figure above if
A) the demand were more elastic. B) the supply were more elastic. C) neither of the above. D) both A and B above.
Economics
Using the scenario above why might the results be different for small classes compared to large classes?
What will be an ideal response?
Economics