If the government imposes a price floor that is higher than the market clearing price, then
A. both consumer surplus and producer surplus will stay the same.
B. consumer surplus will decrease while producer surplus will increase.
C. both consumer surplus and producer surplus will decrease.
D. both consumer surplus and producer surplus will increase.
Answer: C
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Financial intermediaries are:
A. institutions that channel funds from people who have them to people who want them. B. government officials who bring together buyers and sellers in a market. C. those who negotiate terms of settlement between borrower and lender when one is in default. D. those who negotiate terms of settlement between buyer and seller when one is in default.
Critics of the Keynesian view of closing a recessionary gap argue that
a. Keynesians fail to appreciate the self-correcting nature of the economy b. government spending is virtually cost-free because resources are unemployed c. deficit financing places no burden on the economy d. public works programs never continue beyond their usefulness e. deficits are always needed to stimulate the economy
A monopolist sets price at $10 and sells 100 units. The corresponding marginal revenue is $5 and marginal cost $3. What recommendation regarding price and quantity would you give this monopolist? Use a graph if you wish.
What will be an ideal response?
The area below the price and above the supply curve measures the producer surplus in a market
a. True b. False Indicate whether the statement is true or false