Suppose that producers are richer than consumers. Is a price support program fair? Explain your answer
What will be an ideal response?
A price support program is unfair. It is unfair under the fair rules approach to fairness because a price support prevents voluntary exchange. And, if producers are richer than consumers, it is unfair under a fair results approach because the price support further enriches the (already rich) producers while decreasing the income of the (already poor) consumers. So in this case a price support redistributes income from the poor to the rich.
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For any given price, a firm in a competitive market will maximize profit by selecting the level of output at which price intersects the
a. average total cost curve. b. average variable cost curve. c. marginal cost curve. d. marginal revenue curve.
Refer to the given data. Assuming the prices of resources a and b are $5 and $8 respectively, what is the least costly combination of resources for the firm to employ in producing 192 units of output?
Answer the question on the basis of the following marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit.
A. 2 of a and 6 of b.
B. 6 of a and 2 of b.
C. 4 of a and 3 of b.
D. 3 of a and 4 of b.