The consumer surplus is
A. the area under the demand curve from the origin to the quantity purchased.
B. the area under the demand curve but above the price line from the origin to the quantity purchased.
C. the area under the supply curve from the origin to the quantity produced.
D. the area under the supply curve but below the price line from the origin to the quantity purchased.
Answer: B
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The opportunity cost of an activity
a. depends on the individual's subjective values and opinions b. is the same for everyone c. must be calculated and known before undertaking that activity d. is irrelevant to decision making e. is not related to time
Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in:
a. airplanes. b. automobiles. c. both goods. d. neither good.
Which of the following tax structures helps in reducing income inequality?
a. Proportional tax structure b. Regressive tax structure c. Indirect tax structure d. Progressive tax structure e. A combination of proportional and regressive tax structure.
Figure 7-13
Figure 7-13 shows the average total cost curves of four firms that produce milk. Some of the dairies are more productive. AR = P is the long-run price of milk. How many of these dairies will remain in the industry in the long run?
a.
all of them
b.
only 2
c.
only 3
d.
cannot determine with information given