The market surplus induced by price supports can be eliminated through all of the following except
A. Increased subsidies.
B. Export sales.
C. Restrictions on supply.
D. Government purchases.
Answer: A
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How does a natural monopoly differ from a firm that becomes a monopoly due to network effects?
What will be an ideal response?
The primary economic function of the financial system is to
a. keep interest rates low. b. provide expert advice to savers and investors. c. match one person's consumption expenditures with another person's capital expenditures. d. match one person's saving with another person's investment.
Figure 7-6
Between $3 and $4, the price elasticity of the demand curve depicted in is
a.
relatively inelastic.
b.
approximately equal to -0.33.
c.
approximately equal to -3.
d.
both a and b.
Refer to the graph shown. If the government imposed a price ceiling of $4, producer surplus would:
A. fall from 8 to 2. B. fall from 16 to 4. C. increase from 2 to 4. D. increase from 4 to 8.