What is the producer surplus from producing coffee mugs?

Suppose that the price of a coffee mug is $2 Lees marginal cost of producing coffee mugs $0.50 for Show more Suppose that the price of a coffee mug is $2 Lees marginal cost of producing coffee mugs $0.50 for the first mug Tammys marginal cost of producing coffee mugs is $1 for the second mug Stans marginal cost of producing coffee mugs is $1.50 for the third mug Joys marginal cost of producing coffee mugs is $2 for the fourth mug and Jodys marginal cost of producing coffee mugs is $3 for the fifth mug. In equilibrium What is the producer surplus from producing coffee mugs? A) $0 B)$2 C)$3 D) $6 2) If demand is inelastic and the government decides to raise the tax on water. Then the price for water will increase by a amount and water consumers will bear a share of the tax A) large;large B) small;large C) small;small D) large;small 3) Money spent on one product cannot be used on another product so the brain reacts in a negative way to the thought of spending money. This is consistent with the principle of A) Marginal utility B) Voluntary exchange C) Opportunity cost D) diminishing returns 4) Diminishing marginal returns implies that firms A) require fewer and fewer workers to produce each additional unit of output B)get increasing amounts of revenue for each unit of output they produce C) get decreasing amounts of revenue for each unit of output they produce D) require more and more workers to produce each additional unit of output 5) The effect of spreading out the fixed costs outweighing the effect of diminishing returns is illustrated by the average cost curve A) long-run;increasing B) loing-run; decreasing C) short-run; increasing D) short-run; decreasing Show less

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