Suppose a consumer is willing to pay a maximum of $45 for a brand of perfume whose price increases from $37 to $41 . What will be the impact of this price rise on the consumer surplus?
a. Consumer surplus will increase by $8.
b. Consumer surplus will decline by $8.
c. Consumer surplus will increase by $4.
d. Consumer surplus will decline by $4.
D
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Inefficiency is best illustrated by which of the following?
a. foregoing civilian goods in order to produce more military goods b. limiting economic growth by reducing capital spending c. high levels of unemployment of labor and other resources that could be productively employed d. producing outside the production possibilities frontier
Suppose that country A produces mostly consumption goods and few investment goods, while country B produces mostly investment goods with few consumption goods. Other things constant, which of the following is most likely to happen in the future?
a. The per capita income of country A will grow more rapidly than country B. b. The population of country B will grow more rapidly than country A. c. The production possibilities curve (PPC) of country B will shift out more rapidly than the PPC of country A. d. The production possibilities curve (PPC) of country A will shift out more rapidly than the PPC of country B.
Infant industries are:
a. manufacturing activities that make baby products. b. industries that cannot currently withstand foreign competition but are expected to grow and mature so that they can compete internationally. c. industries that can currently withstand foreign competition in the domestic market but are expected to mature into export industries. d. industries that cannot currently withstand foreign competition in either the domestic or the export market but are expected to mature into multinational firms.
Oligopoly is a market structure in which
A. there are only a few sellers. B. firms are price takers. C. there exist many firms, each producing a product that is a close, but imperfect, substitute for the products of other firms. D. there is only one seller.