If the government keeps the price of bread low through subsidies, and farmers consequently buy bread to feed to their pigs, we can infer that
A) pigs are more valuable than people.
B) pork is more valuable than people.
C) the farmers find it efficient to feed bread to pigs.
D) the market system is not working.
E) waste is occurring because marginal benefit is less than marginal cost.
C
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Assume that the professors at a local college have gone without a pay increase for 4 years during a tough time. Suppose that things start to look up and the President of the college wants to make up for lost time. If the CPI in 2002 was 150 and 175 in 2006, how much will salaries have to increase to bring the faculty back up to their real income from 2002?
a. 175.0% b. 150.0% c. 25.0% d. 16.7% e. 14.3%
Consumer surplus
a. is the amount a buyer pays for a good minus the amount the buyer is willing to pay for it. b. is represented on a supply-demand graph by the area below the price and above the demand curve. c. measures the benefit sellers receive from participating in a market. d. measures the benefit buyers receive from participating in a market.