Assume a market price gets set artificially high-that is, it gets set above the equilibrium price. This change means:
A. Every consumer loses surplus, and it all gets transferred to producers.
B. Some consumers drop out of the market, and those left lose some surplus.
C. Every producer gains surplus, due to the higher price now being charged.
D. None of these is true.
Answer: B
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Goods with few available substitutes tend to have inelastic demand curves
a. True b. False Indicate whether the statement is true or false
Bank A has checkable deposits of $900,000 and total reserves of $112,000. If the required reserve ratio is 8 percent, the bank has excess reserves of
A) $40,000. B) $72,000. C) $13,440. D) $4,000.
If marginal cost is below average total cost, average total cost will
A. be decreasing. B. be maximized. C. be increasing. D. remain constant.
Related to the Economics in Practice on page 374: Considerable evidence suggests that recently in the United States, executive compensation has ________ and the real wage of the average worker has ________.
A. increased; remained stagnant B. remained stagnant; decreased C. decreased; increased D. increased; decreased