Refer to the figure above. Which of the following is likely to happen if a price control above the equilibrium price is imposed?
A) Quantity demanded will exceed quantity supplied.
B) Quantity supplied will exceed quantity demanded.
C) Consumer surplus will increase.
D) Producer surplus will decrease.
B
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Which of the following examples best describes the Law of Diminishing Marginal Benefit?
A) If a seller of notebooks in a perfectly competitive market charges above the market price, his profit decreases. B) With each additional pen Jill buys, her willingness to pay for another pen decreases. C) Each additional unit of ice cream that John consumes gives him more and more satisfaction. D) If the weather gets cold, the demand for ice cream will fall.
Using the data in the above table, suppose imports equal $250 billion and investment equals $1,000 billion. Hence government expenditure equals
A) $1,000 billion. B) $750 billion. C) $500 billion. D) $250 billion.
Craft unions typically attempt to increase wages by
a. setting a wage floor b. reducing labor supply c. increasing labor demand d. reducing initiation fees e. expanding new union memberships
Exhibit 7-14 Cost curves
In Exhibit 7-14, a firm finds that it is experiencing numerous managerial and information problems. The position of its short- and long-run average total cost curves suggest that it is operating at a production level:
A. between 0 and 1,000. B. between 1,000 and 2,000. C. between 2,000 and 3,000. D. between 3,000 and 4,000.