The total amount of consumer surplus and producer surplus is at its maximum when
A. the government imposes a price floor that is higher than the market clearing price.
B. consumers and producers are allowed to trade at the market clearing price.
C. the government imposes a price ceiling that is lower than the market clearing price.
D. free market exchanges do not exist.
Answer: B
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A country experiencing a growth rate of 12% per year can go from being one of the poorest to one of the richest in
a. one generation. In the last couple of decades China's growth rate has been higher than 12%. b. one generation. However, in the last couple of decades not even China's growth rate has been this high. c. three generations. In the last couple of decades China's growth rate has been higher than 12%. d. three generations. However, in the last couple of decades not even China's growth rate has been this high.
Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of economic fluctuations. What are some things policymakers can do to boost the economy when aggregate demand is inadequate to ensure full employment?
Which of the following would be most appropriate if the Federal Reserve wanted to increase the money supply in order to stimulate the economy?
A. Buy U.S. government securities. B. Force the Treasury to reduce the national debt. C. Raise the discount rate. D. Increase the reserve requirements.
If the firm is producing in the long run, then the firm's average total cost curve:
A. equals the average variable cost curve. B. is less than the average variable cost curve. C. exceeds the average variable cost curve. D. equals zero.