Suppose that the equilibrium price in the market for widgets is $5 . If a law increased the minimum legal price for widgets to $6,
a. the resulting increase in consumer surplus would be larger than any possible loss of producer surplus.
b. the resulting increase in consumer surplus would be smaller than any possible loss of producer surplus.
c. any possible increase in producer surplus would be larger than the loss of consumer surplus.
d. any possible increase in producer surplus would be smaller than the loss of consumer surplus.
d
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The following diagram shows the rate of inflation each year during a five year span. Use this diagram to answer the next question.
In which year did prices go down?
A. Year 1 B. Year 2 C. Year 3 D. Year 4
A ________ is bought at a price below its face value, and the ________ value is repaid at the maturity date
A) coupon bond; discount B) discount bond; discount C) coupon bond; face D) discount bond; face
Market failure occurs when: a. the stock markets tumble due to heavy selling
b. the market economy fails to allocate resources efficiently. c. demand shows signs of slowing down. d. a country cannot produce a particular good or service at a lower opportunity cost than other countries.
In terms of efficiency, any point on a production possibilities frontier is as good another.
Answer the following statement true (T) or false (F)