Refer to Figure 26.2 for a monopolistically competitive firm. At the profit-maximizing output and price, this firm is producing at an output level that achieves
A. Neither productive nor allocative efficiency.
B. Productive efficiency.
C. Maximum economies of scale.
D. Allocative efficiency.
Answer: A
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Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a concert ticket. If the price of one ticket is $50
A) no one will buy a ticket. B) Violet's consumer surplus is $2. C) consumer surplus will be maximized. D) everyone will buy a ticket.
With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers, then positive analysis would conclude:
A. the policy was effective, since surplus gained by consumers through lower prices is greater than the surplus they lost through deadweight loss.
B. the policy was ineffective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
C. the policy was effective, since surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
D. the policy was ineffective, since the amount of deadweight loss is greater than the surplus gained by consumers from lower prices.
The marginal factor cost for a monopsonist is:
a. equal to the market wage rate. b. above the market wage rate. c. below the market wage rate. d. affected by the fact that workers are less willing to work than under conditions of perfect competition. e. lower than the marginal revenue product of labor in equilibrium.
Changes in which of the following will not cause the SRAS curve to shift?
A) the wage rate B) prices of nonlabor inputs C) the price level D) productivity E) All of the above will cause the SRAS curve to shift.