Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $6 and a quantity of 40 units. In equilibrium, consumer surplus is equal to:
A. 120.
B. 40.
C. 160.
D. 80.
Answer: D
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An increase in the number of buyers in the market causes
a. a decrease in equilibrium quantity b. a decrease in equilibrium price c. an increase in demand d. a decrease in production e. an increase in supply
Which of the following is not an argument against free trade?
A. Diversification and defense B. Comparative advantage C. Dumping by monopolistically inclined exporters D. Infant industries
The way the government keeps price floors in effect is by _____.
Fill in the blank(s) with the appropriate word(s).
If a consumer is choosing the bundle of goods that maximizes utility subject to a budget constraint, then
A. the rate at which income affects the utility-maximizing choice is equal for all goods. B. the ratio of marginal utility to price is equal for all goods. C. the rate at which the consumer is willing to substitute between goods is equal to the market rate of exchange. D. both b and c E. all of the above