Aiden must decide whether or not to go to law school. He knows that he can earn $50,000 per year with his bachelor's degree, but he expects to earn a minimum of $58,000 per year with the law degree. An economist would advise him to
a. take the job that just requires the bachelor's degree.
b. go to law school, but only if he can finish within 3 years.
c. go to law school.
d. consider costs, revenues, and any nonmonetary job considerations he might have also.
D
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Suppose you work for a government agency that is considering removing certain agricultural subsidies. The removal of these subsidies will increase the price, thus lowering consumers' welfare
Because only aggregate market data is available, you are unable to measure the exact values for the compensated and equivalent variation by consumer. However, you are able to estimate the change in market consumer surplus. Assuming agricultural products are normal goods, how does your estimate of consumer surplus compare to the unknown EV and CV? Explain. Under what conditions will the three measures of welfare be close to one another?
Many studies show that price and concentration ratios are
a. not related b. inversely related c. positively related d. constant e. both higher in perfectly competitive markets