Suppose that a perfectly competitive market is in equilibrium, and then market supply decreases. Which of the following would happen?
a. both producer and consumer surplus would increase
b. both producer and consumer surplus would decrease
c. producer surplus would decrease and consumer surplus would increase
d. producer surplus would increase and consumer surplus would decrease
e. producer and consumer surplus would remain unchanged
B
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Considering a PPF with health care services on the vertical axis and other goods and services on the horizontal axis, the increasing production of health care services in the United States as a result of the aging population represents
A) a movement upward along the PPF. B) an outward shift of the PPF from the vertical axis. C) an outward shift of the PPF from the horizontal axis. D) a movement downward along the PPF.
The figure above shows short-run cost curves for a perfectly competitive firm. If the price of the product is $8, in the short run the firm will
A) make zero economic profit. B) make an economic profit. C) incur an economic loss. D) None of the above answers is correct because more information is needed to determine the firm's economic profit or loss.
Monetarists believe the best way to halt inflation is to
a. put more money into the economy b. raise taxes c. slow the growth rate of the money supply d. impose controls on prices e. none of the above
When Susan Sneed paid Ralph Mentz three jars of homemade jam for repairing her rocking chair
a. GDP rose b. the money supply increased c. M1 rose but M2 fell d. currency was reduced e. an economic transaction occurred