In a market economy, producers will produce the goods and services that
A. Producers want to purchase.
B. Consumers demand.
C. Optimize producer utility.
D. Consumers need the most.
Answer: B
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Refer to the accompanying figure. Assume the market is originally at point W. Movement to point Y is the result of:
A. a decrease in supply and an increase in quantity demanded. B. an increase in supply and an increase in demand. C. an increase in demand and an increase in quantity supplied. D. an increase in supply and an increase in quantity demanded.
Figure 3-19
Refer to . If the government mandated a price increase from Pe to a higher price, then
a.
total surplus would decrease.
b.
consumer surplus would increase.
c.
total surplus would increase, since producer surplus would increase.
d.
total surplus would remain unchanged.
Refer to the following figure. What is the equation for marginal revenue?
A. MR = 4,000 - 0.005P B. MR = 20 - 200Q C. MR = 4,000 - 200Q D. MR = 20 - 0.01Q E. MR = 4,000 - 200P
An apple farmer must decide how many apples to harvest for the world apple market. He knows that there is a one-third probability that the world price will be $1, a one-third probability that it will be $1.50, and a one-third probability that it will be $2. His cost function is C(Q) = 0.01Q2. The farmer's maximum expected profit is:
A. $0. B. ?$7.75. C. $7.75. D. None of the answers are correct.