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Question
Refer to the graph shown. Total surplus is maximized when:
A. the market is in equilibrium at price P1 and quantity Q1.
B. producers are able to charge a price above P1.
C. consumers are able to pay a price below P1.
D. excess demand is maximized.
Answer
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Related questions
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B. Gasoline is an inferior good.
C. Demand for gasoline is elastic.
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Government may not have an incentive to correct a market failure because: A. government doesn't have the information it needs to correct the market failure.
B. government reflects politics, which reflects individuals' interests in trying to gain more for themselves.
C. policy makers fear that intervention will lead to a Pareto optimal outcome.
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All of the following are justifications for government intervention except: A. too much competition.
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Q:
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Q:
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B. market incentive plans.
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Adverse selection problems can occur when buyers and sellers have different amounts of information about a good for sale.
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If 1 Canadian dollar costs 0.60 U.S. dollar, 1 U.S. dollar costs: A. 0.40 Canadian dollar.
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One of the 10 sources of U.S. comparative advantage mentioned in the text is: A. religious diversity.
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Q:
If it takes you an hour to make a rational decision and the opportunity cost of that hour is $100, you will: A. always make rational decisions.
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Q:
Your opportunity cost of taking this course is: A. the tuition you paid for the course.
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Q:
Which of the following best defines rational behavior? A. Analyzing the total gains from a decision
B. Improving net gain by pursuing decisions as long as the marginal benefits exceed the marginal costs
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The table below shows how the marginal benefit of videotape rentals varies for Carol with the number rented per month. The price of each tape rental is reduced from $2.99 to $1.99. Assuming that the price of a rental accurately reflects the marginal cost to Carol and that she is rational, she will increase the number of tapes rented per month from: A. one to two.
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Q:
Mary buys cell-phone services from a company that charges $30 per month. For that $30 she is allowed 600 minutes of free calls and then pays 25 cents per minute for any calls above 600 minutes. Mary has used 600 minutes this month so far. What is her marginal cost per minute of making additional calls? A. 25 cents
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Microsoft filed a lawsuit against people who sent spam (junk e-mail) and a website owner who hosted spam services. A spokesman for Microsoft said that Microsoft was "trying to change the economics of spam" by increasing the cost of being a spammer. An economist most likely would agree with which statement about Microsoft's actions? A. A more effective approach would be to educate spammers about the costs they impose on others.
B. A more effective approach would be to appeal to the morals of the spammers and tell them to follow the Golden Rule.
C. Microsoft's approach of trying to change the costs of spamming is the most effective way to change behavior.
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Q:
Alexandra has determined that studying an hour for her economics quiz will improve her grade on the quiz from 75 to 100. She also determines that this improvement is worth $20. To study for an hour for her economics quiz, however, she will have to work one fewer hour at her part-time job. Alexandra should: A. study for the quiz as long as her hourly wage rate is less than $20.
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D. social forces are sometimes more important than market forces.
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B. foreign countries can have comparative advantages in all goods.
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D. the United States is lending more to foreign countries than it is borrowing from foreign countries.
Q:
Refer to the graph shown. Given these production possibility curves, you would suggest that: A. Country A should specialize in widgets and Country B in wadgets.
B. No trade should take place.
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D. Both countries should produce an equal amount of each.
Q:
When a country runs a trade deficit, it does so by: A. borrowing from foreign countries or selling assets to them.
B. borrowing from foreign countries or buying assets from them.
C. lending to foreign countries or selling assets to them.
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Q:
If Americans suddenly wanted European products because they were deemed more fashionable, the: A. demand curve for the euro would shift right.
B. demand curve for the euro would shift left.
C. supply curve for the euro would shift right.
D. supply curve for the euro would shift left.
Q:
All of the following would cause the yen (currency of Japan) to appreciate except: A. the discovery of a vegetable only grown in Japan that could be used as biofuel.
B. increased interest rates on Japanese financial assets.
C. a decrease in Japanese income.
D. a new, global trend for Japanese sushi.