Assume the market is in equilibrium in the graph shown at demand D and supply S1. If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true?
A. Consumer surplus decreases, but producer surplus increases.
B. Both consumer and producer surplus decrease.
C. Both consumer and producer surplus increase.
D. Consumer surplus increases, but producer surplus decreases.
Answer: C
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The informal sector can be a significant drag on the economies of developing countries because the firms in the informal sector
A) employ illegal immigrants from other countries. B) produce goods and services no one wants. C) sell their goods and services to citizens in other countries. D) do not pay taxes to the government.
Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output, this firm's price will exceed its marginal cost by ____ and its average total cost by ____.
A. $20; $27.33
B. $10; $10.40
C. $24; $27.33
D. $30; $20.50
Based on the graph showing an expansionary policy response to a negative supply shock, an increase in aggregate demand has the negative consequence of ______.
a. decreasing price levels
b. increasing unemployment
c. increasing inflation
d. decreasing output
A “single tax” on land was proposed in the nineteenth century by
A. Lloyd George. B. Henry George. C. George Washington. D. George Sands.