Refer to the figure above. What is the total surplus before Lithasia opens up to free trade?
A) $10
B) $20
C) $30
D) $40
C
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The intention of a price ceiling is to help consumers by forcing a price that is below the equilibrium price. What is one unintended consequence of this policy?
A. Consumers face a shortage of the good and decreased consumer surplus. B. Foreign producers are hurt by the lower price and economic surplus is increased. C. Producers face a shortage or resources and economic surplus is decreased. D. Consumers face a shortage of the good and increased consumer surplus.
If the price elasticity of demand is elastic, then:
a. Ed < 1. b. there are likely a large number of substitute products available. c. an increase in the price will increase total revenue. d. consumers are s not very responsive to a price increase.
In a linear regression equation of the form Y = a + bX, the intercept parameter a shows
A. the amount that X changes when Y changes by one unit. B. the value of X when Y is zero. C. the amount that Y changes when X changes by one unit. D. the value of Y when X is zero.
Suppose the government of South Island fixes the exchange rate of its currency, the Islandia, in terms of the U.S. dollar. Initially the exchange rate is set at $1 per Islandia. In a crisis, the government changes the exchange rate to $0.50 per Islandia. This is an example of a(n):
A. revaluation. B. devaluation. C. appreciation. D. depreciation.