A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it
a. maximizes both the total revenue for firms and the quantity supplied of the product.
b. maximizes the combined welfare of buyers and sellers.
c. minimizes costs and maximizes output.
d. minimizes the level of welfare payments.
b
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Other things equal, when the supply of workers is scarce, one would predict that market wages would be
a. relatively high. b. relatively low. c. determined solely by factors that affect demand. d. determined outside the domain of economic theory.
Does voluntary exchange create wealth (value)?
What will be an ideal response?
On average, younger people have:
A. similar unemployment rates than older people. B. higher unemployment rates than older people. C. uncorrelated unemployment rates compared to those of older people. D. lower unemployment rates than older people.
Exhibit 3-5 Supply for Tucker's Cola Data Quantity supplied per week(millions of gallons) Price pergallon 6 $3.00 5 2.50 4 2.00 3 1.50 2 1.00 1 .50 Exhibit 3-5 shows the supply schedule for Tucker's Cola. Suppose there are four additional suppliers of cola in the market. When the price per gallon of cola is $1.50, the first supplier is willing to sell 10 million gallons, the second supplier is willing to sell 2 million gallons, the third supplier is willing to sell 5 million gallons, and the fourth supplier is willing to sell 0 gallons. The market quantity supplied of cola when the price is $1.50 is
A. 17 million gallons. B. 20 million gallons. C. 30 million gallons. D. 0 gallons.