A surplus can exist in the market only if there is:
a. a non binding price floor.
b. a binding price floor.
c. a binding price ceiling.
d. a non binding price ceiling.
B
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The producer can raise the level of profit by hiring more units of a resource if:
a. the marginal revenue product of the resource is equal to the marginal factor cost. b. the marginal factor cost becomes negative. c. the marginal revenue product of the resource is greater than the marginal factor cost. d. the marginal revenue product falls to zero. e. the marginal revenue product of the resource is less than the marginal factor cost.
For a given decrease in demand, the effect on price is largest and the effect on quantity exchanged smallest when: a. supply is perfectly elastic
b. supply is elastic. c. supply is unit elastic. d. supply is perfectly inelastic.
What do economists call the difference between the most an individual is willing to pay for an item and what the individual actually has to pay?
a. price elasticity b. consumer surplus c. indifference curve d. payment terms
In Figure 29.1, the area that represents the consumer surplus under perfect competition is
A. FPPCC. B. FPmonopolyBE. C. PmonopolyAB. D. PPCAC.