The darkened area in the figure above is the
A) deadweight loss.
B) firm's economic loss.
C) consumer surplus.
D) firm's total cost.
E) firm's total revenue.
B
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If Joe receives an increase in his wage rate and decides to decrease his hours worked, the
A) substitution effect and the income effect must be equal. B) substitution effect must exceed the income effect. C) income effect must exceed the substitution effect. D) substitution effect must be zero.
The price elasticity of supply of hot dog buns is estimated to be 1.5. Holding everything else constant, this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by
A) approximately 25 percent. B) 1.5 percent. C) approximately 5 percent. D) 15 percent.
Both buyers and sellers are price takers in a perfectly competitive market because
A) each buyer and seller is too small relative to others to independently affect the market price. B) both buyers and sellers in a perfectly competitive market are concerned for the welfare of others. C) the price is determined by government intervention and dictated to buyers and sellers. D) each buyer and seller knows it is illegal to conspire to affect price.
An essential characteristic of a perfectly competitive market is:
A. goods are standardized. B. sellers are price makers. C. buyers and sellers share market power. D. goods are unique.