The total amount of consumer surplus and producer surplus is at its maximum when
A) consumers and producers are allowed to trade at the market clearing price.
B) the government imposes a price floor that is higher than the market clearing price.
C) the government imposes a price ceiling that is lower than the market clearing price.
D) free market exchanges do not exist.
A
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Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is total output in the Nash equilibrium?
A. 4,000 B. 2,666.66 C. 1,600 D. 8,000
If the economy is characterized by a certain and stable LM curve, then ________ target produces ________ fluctuations in aggregate output
A) an interest rate; smaller B) a money supply; smaller C) a money supply; larger D) an exchange rate; larger
Suppose consumption decreases at each price level. As a result, aggregate demand __________, and the AD curve shifts __________
A) increases; leftward B) decreases; leftward C) increases; rightward D) decreases; rightward
An economy has no imports and no taxes. The marginal propensity to save is 0.4. A? ______ increase in autonomous expenditure increases equilibrium expenditure by? $60 billion. The multiplier is? ______.
A. ?$38 ?billion; 24 B. ?$24 ?billion; 2.50 C. ?$96 ?billion; 0.63 D. ?$150 ?billion; 2.50