Refer to the above diagram. The quantity difference between areas A and C for the indicated price reduction measures:
A. monopoly price.
B. marginal revenue.
C. a welfare or efficiency loss.
D. marginal cost.
Answer: B
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A positive spending shock ________ real interest rates and ________ output in the short run, thereby its effect on stock prices is ________
A) raises; lowers; positive B) raises; raises; ambiguous C) lowers; raises; negative D) lowers; raises; positive
If the market price of bicycle frames is $500, and frame welders earn a wage of $50, how many welders will be hired?
a. 10. b. More than 10. c. Fewer than 10. d. Hiring will stop when the MP is 10. e. Hiring will stop when the MP is 0.1.
Consumer surplus is created when
a. a person trades away a good that yields diminishing marginal utility b. a person's total utility increases when consuming an additional unit of a good c. a good is purchased at a price that is less than the price the consumer would have been willing to pay d. the total utility of a good is greater than its marginal utility e. many consumers want to buy a good and the price goes up
The reserve requirement is:
A. the regulation that sets the minimum fraction of deposits banks must hold in reserve. B. the dollar amount of cash banks must keep on hand and not loan out. C. currently set at $2 million for most banks. D. a loose guideline for how much banks must hold in reserves.