Question

2 Consider This) The main problem with welfare cliffs is that they Multiple Choice Skipped eBook discourage welfare recipients from moving into higher paying jobs and ultimately becoming self-sufficient. cause dramatic increases in government spending at times when tax revenues are falling. occur randomly, further destabilizing the lives of recipients who are suddenly cut off significantly increase the number of people receiving welfare 6 P2 АТС Skipped MC MR a, a, Quantity eBook Refer to the diagram for a natural monopolist. If a regulatory commission set a maximum price of P1, the monopolist would produce output Multiple Choice 02 and realize a normal profit Q4 and realize a normal profit. O3 and realize an economic profit. Q4 and realize a loss. Payments that a firm makes to obtain needed resources comprise its 21 Multiple Choice Skipped costs eBook profits. capital revenues Total Cost Pe Total Benefit Per Year $10,000 24,000 Year $16,000 36,000 Plan ALevees Plan B - Smal.1 Reservoir Plan CMedium Reservoir Plan D = Large Reservoir 44,000 52,000 Skipped 72,000 64,000 eBook For Plan D marginal costs and marginal benefits are Multiple Choice $72,000 and $64,000, respectively $28,000 and $12,000, respectively $24,000 and $18,000, respectively $16,000 and $28,000, respectively. Firm A High Price Low Price A = $250 A = $325 152 B $250 B $200 A $200 A $175 Skipped B $325 B $175 Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. If the two firms collude to maximize joint profits, the total profits for the two firms will be eBook Multiple Choice $350 million $400 millon. $500 mllion $525 mlon.

Answer 1

Question 2

The theory of welfare cliff states that as the person receiving welfare benefits starts working and thus experience an increase in his or her earned income, he or she ultimately reaches at the maximum point of eligibility with respect to welfare benefits.

Any further increase in his or her earned income reduces his or her welfare benefits.

This theory further states that this fear of reduction in welfare benefits compel the person to refrain from moving to high paying jobs.

So,

The main problem with welfare cliffs is that they discourage welfare recipients from moving into higher paying jobs and ultimately becoming self-sufficient.

Hence, the correct answer is the option (1).

Question 6

If the price P₁ then price line intersects the demand curve corresponding to the output Q₄.

So, firm will produce Q₄ level of output.

The ATC corresponding to Q₄ level of output is greater than the price, P₁.

So, firm will incur loss.

Thus,

The monopolist would produce output Q₄, and will realize a loss.

Hence, the correct answer is the option (4).

Question 21

Firm need resources for producing goods and services.

So, firm spends money to purchase such resources.

These resources can be divided into four factors of production - Land, labor, capital, and entrepreneur.

All the expenditure incurred on these factors or resources constitute the cost of production of the firm.

So,

Payments that a firm makes to obtain needed resources comprise its costs.

Hence, the correct answer is the option (1).