Total market supply can be derived by
A) horizontally summing individual supply curves at each and every price level.
B) vertically summing individual supply curves at the current technology level.
C) adding up the largest quantity demanded at various prices.
D) looking at the changes in the price of raw materials needed to produce the product.
Answer: A
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Voluntary export restraints
A) have the same effect as an import ban. B) violate the spirit of international trade agreements. C) are illegal under the international trading rules. D) all of the above.
A market is allocatively efficient if
A) the sum of the consumer surplus and the producer surplus has been maximized. B) consumer surplus has been maximized. C) producer surplus has been maximized. D) profit has been maximized.
Suppose that the market for labor is initially in equilibrium. If the firm employs labor-augmenting technology, the equilibrium wage
a. and the equilibrium quantity of labor will rise. b. and the equilibrium quantity of labor will fall. c. will rise, and the equilibrium quantity of labor will fall. d. will fall, and the equilibrium quantity of labor will rise.
According to prospect theory, firms are more likely to shrink packages than raise prices because:
A. consumers feel the loss of a price increase more than they feel the loss of buying a smaller package for their money. B. they don't understand that consumers recognize price increases easily, regardless of what form they take. C. consumers associate smaller packages with higher quality luxury goods. D. consumers are generally trying to downsize their purchases and lead simpler lives.