Question

1. Which of the following statements is true?

(A) Producer Surplus is the Area of a Triangle.

(B) Market Price = Producer Surplus + Cost of Production.

(C) Producer Surplus can be negative.

(D) A change in quantity shifts the supply curve.

2. Consider the following statement: “According to the Washington Post, President Trump has lied 16,000 times while in office. This is unprecedented for a U.S. President.” What statistical fallacy best fits this statement?

(A) Berkson’s Paradox.

(B) Base Rate Fallacy.

(C) Overgeneralization.

(D) Correlation implies causation.

3. Atheists and deists sometimes use The Problem of Suffering to argue against the existence of an all-powerful, all-knowing, and all-loving God. The Problem of Suffering is often phrased as follows: An all-powerful, all-knowing, and all-loving God would never permit suffering. Yet suffering exists. Therefore, such a God does not exist. Although this argument is logically valid, it is not logically sound. Why not?

(A) If God permits free will for His Creation, then he cannot intercede to prevent suffering without violating free will.

(B) Love does not necessarily mean a protection from suffering (eg. a dentist’s visit).

(C) Both (A) and (B).

(D) Because Kanye is the GOAT.

4. There are four distinct activities you can do on a Friday night: 1. Taking your date on a romantic, starlit boat ride, while serenading her with your acoustic rendition of “Jojo’s Theme.” 2. Staying at home and reading ancient philosophy. 3. Going camping in Alberta with Chris Hemsworth and Emilia Clarke. 4. Working out with Hugh Jackman. Getting swole. Your favourite activity is reading ancient philosophy, followed by camping. You don’t enjoy romantic dates, and feel ambivalent about working out with Hugh Jackman. What is your opportunity cost of camping with Chris Hemsworth and Emilia Clarke?

A) Your benefit from the romantic date.

(B) Your benefit from staying home and reading philosophy.

(C) Your benefit from working out with Hugh Jackman.

(D) Your combined pleasure from the romantic date, staying home and reading philosophy, and working out with Hugh Jackman.

Answer 1

Answer 1:- The correct answer is part (a) - producer surplus is the area of triangle

Explanation:- producer's surplus can be defined as the difference between the price producer is willing to accept for the commodity and the actual revenue or price he receives from the consumer. The producer's surplus is usually shown by a triangle like figure on the graph between the supply curve, price and y-axis. To understand it clearly, an image of the graph has been uploaded for the reference.

• Part (b) is incorrect because the market price of a good is not determined by sum of producer's surplus and cost of production. It depends to factors such as demand and supply.
• Part (c) is incorrect because producer surplus cannot be negative as surplus word itself denotes the excess revenue earned by the producer over and above the price at which he was willing to sell.
• Part (d) is incorrect because supply curve shifts because of factors such as price, change in technology, government regulation etc.