Given the scenario described, if the market price of hammers decreased from $13 to $11:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13.
A. total producer surplus would decrease from $9 to $5.
B. total producer surplus would increase from $5 to $9.
C. total producer surplus would decrease from $30 to $17.
D. total producer surplus would remain unchanged.
A. total producer surplus would decrease from $9 to $5.
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If an economy is producing inefficiently, it is
A. possible to increase production of all goods simultaneously. B. possible to increase production of one good at the expense of another. C. not possible to increase production of any good. D. not possible to increase economic growth. E. possible to increase production with no effort.
Allocative efficiency is achieved when the marginal benefit of a good
A) exceeds the marginal cost by as much as possible. B) exceeds the marginal cost, but not by as much as possible. C) is less than the marginal cost. D) equals the marginal cost. E) equals zero.
When a firm is able to engage in perfect price discrimination, its marginal revenue curve
A) lies below its demand curve. B) is the same as its demand curve. C) lies above its demand curve. D) is the same as its supply curve. E) is undefined because it does not exist.
If consumer purchases of a good are highly sensitive to the price of the good, this is illustrated by a
a. demand curve that is relatively flat (more horizontal). b. demand curve that is relatively steep (more vertical). c. supply curve that is relatively flat (more horizontal). d. supply curve that is relatively steep (more vertical).