Refer to the above diagram. The firm will shut down at any price less than:
A. P1.
B. P2.
C. P3.
D. P4.
Answer: A. P1.
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Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?
a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
If the government wants to raise tax revenue and shift most of the tax burden to the sellers it would impose a tax on a good with a:
A. flat (elastic) demand curve and a steep (inelastic) supply curve. B. steep (inelastic) demand curve and a flat (elastic) supply curve. C. steep (inelastic) demand curve and steep (inelastic) demand curve. D. flat (elastic) demand curve and a flat (elastic) supply curve.
Use the above figure. Total revenue at the profit-maximizing output is
A. $5,600. B. $8,000. C. $4,800. D. $9,600.
Refer to the information provided in Figure 3.16 below to answer the question(s) that follow.
Figure 3.16Refer to Figure 3.16. When the economy moves from Point B to Point A, there has been
A. an increase in supply and a decrease in quantity demanded. B. a decrease in both supply and demand. C. a decrease in supply and a decrease in quantity demanded. D. a decrease in demand and a decrease in quantity supplied.