In the above figure, what is the total consumer surplus from all the milk bought if the price of milk is $3.00 per gallon?
A) $16 million
B) $12 million
C) $4 million
D) $2 million
C
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An upturn in business confidence may cause firms to ________ their estimates of MPK, leading to a ________ capital stock that matches MPK to the user cost of capital and thus ________ of net investment
A) lower, larger, a contraction B) lower, larger, an expansion C) lower, smaller, a contraction D) raise, smaller, a contraction E) raise, larger, an expansion
Lazy Lucy's parents decided that they would only pay her tuition if she passes all her classes. They would stop paying her tuition if she procrastinates and fails her courses. Lucy's parent's decision is a solution to a ________problem
a. Adverse selection b. Moral hazard c. Forced bankruptcy d. None of the above
Empirical tests of the HO model have had mixed results. One explanation for this is that
A) the Ricardian model is more detailed. B) it is difficult to measure factor endowments. C) it does not explain the effects of trade on income. D) it assumes that countries have different technologies.
Refer to the above figure. What price-output combination would apply under perfect competition?
A. P4 and Q1 B. P1 and Q1 C. P2 and Q3 D. P3 and Q2