Consumer surplus, the net benefit that consumers get from market exchange, can be used to:
a. measure purchasing power of consumers.
b. measure market supply.
c. measure economic welfare.
d. measure economic growth.
c
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At the socially optimal equilibrium, _____
a. social cost exceeds private cost b. a market is allocatively efficient c. the marginal private cost of a given level of output is equal to the marginal social benefit d. the marginal private cost of a given level of output is greater than the marginal social benefit
A monopsony has an upward sloping supply curve because
A) diminishing marginal product to scale does not exist in a monopsony. B) each additional unit of labor costs less. C) when more units of labor are hired, all laborers must receive the higher wage. D) when more units of labor are hired, only the new workers receive the higher wage.
One major consequence of the planning fallacy is that:
A. People may spend more resources to insure themselves against rare events, but leave themselves uninsured against more common events B. Someone could persist in pursuing a failed policy despite overwhelming evidence of the failure C. Major business projects may create bottlenecks in the organization because they are not completed as scheduled D. Some people may wrongly believe in their forecasting ability to predict future outcomes of risky investments
Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left, but the supply curve shifts less than the demand curve. As a result
A) both the equilibrium price and quantity of MP3 players will decrease. B) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease. C) both the equilibrium price and quantity of MP3 players will increase. D) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.