100%(2)2 out of 2 people found this document helpful
This preview shows page 3 - 7 out of 16 pages.
5. Damien produces 400 gallons of milk a day in a very competitive industry. The marketprice for a gallon of milk is $2. Damien's marginal revenue per gallon of milk is:1) $200.2) $800.3) $2.4) There is not enough information to answer the question.3
Use the following to answer questions 6-8.6. If the above graph represents a subsidy in the market for corn, then which of the following represents the total cost to taxpayers of the subsidy?7. If the above graph represents a subsidy, the deadweight loss is given by:8. The above graph represents the market corn, where the government has issued a per-unit subsidy to corn farmers for every bushel they grow. Which of the following represents the price received by sellers, price paid by buyers, and quantity of corn traded afterthe subsidy?4
9. Nineteenth century economist Alfred Marshall wrote, “when an industry has thus chosen a locality for itself … the mysteries of the trade become no mysteries; but areas it were in the air.” To which economic phenomenon is Marshall referring?1) A business cluster, or decreasing cost industry, is one type of positive externality. 2) A business cluster, or decreasing cost industry, is one type of negative externality.3) A business cluster, or increasing cost industry, is one type of positive externality.4) Marshall is not referring to business clustering.10. Suppose that a hurricane hits both North Carolina and South Carolina. North Carolina has severe price gouging laws in place while South Carolina has none. Bothstates have a shortage of ice. Which state will recover from its ice shortage more quickly?11. If the price of electronic readers falls 6 percent and quantity demanded rises by 9 percent, the elasticity of demand is ______ in absolute value, so demand is ______.12. When there are many buyers and sellers of a good, and the product sold is identical across firms:5