In a competitive market, the market demand is Qd = 150 - 2P and the market supply is Qs = 30 + 4P. A price ceiling of $16 will result in a
A. shortage of 34 units.
B. surplus of 34 units.
C. surplus of 58 units.
D. shortage of 24 units.
Answer: D
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Refer to Figure 12-2. Suppose the firm is currently producing Q2 units. What happens if it expands output to Q3 units?
A) It makes less profit. B) It will be moving toward its profit maximizing output. C) Its profit increases by the size of the vertical distance df. D) It incurs a loss.
Pure economic rent is a payment to a resource that
A) has a high opportunity cost. B) has a perfectly inelastic supply. C) has a negative opportunity cost. D) has a perfectly elastic demand.
According to the Keynesian model, an increase in autonomous investment leads to
A. a more than proportional increase in real Gross Domestic Product (GDP). B. a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP). C. a less than proportional increase in real Gross Domestic Product (GDP). D. a proportional increase in real Gross Domestic Product (GDP).
The point of tangency between a consumer's budget constraint and his or her indifference curve represents
a. complete satisfaction for the consumer. b. the equivalence of prices the consumer pays. c. constrained utility maximization for the consumer. d. the least he or she can spend.