Assume a market price gets set artificially low-that is, it gets set below the equilibrium price. This change means:
A. Some producers drop out of the market, and those left lose some surplus.
B. Every consumer gains surplus, due to the lower price now being charged.
C. Every producer loses surplus, and it all gets transferred to consumers.
D. None of these is true.
Answer: A
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In a perfectly competitive market, if all firms face identical, constant marginal marginal cost curves, then consumer surplus is
A) the area beneath the market demand curve and above the market clearing price. B) the area above the market demand curve and above the market clearing price. C) the total area beneath the market demand curve. D) definitely zero.
Many people consider lump-sum taxes to be unfair to low-income taxpayers
a. True b. False Indicate whether the statement is true or false
How much is the percentage of income earned by the highest quintile on Lorenz curve Q?
In the graph showing the Phillips curve after a positive supply shock, we can see that a positive supply shock would cause ______.
a. a leftward shift in the Phillips curve
b. a rightward shift in the Phillips curve
c. a movement to a point further up the Phillips curve
d. a movement to a point further down the Phillips curve