Figure 4.3 illustrates the demand for tacos. An increase in the demand for tacos is represented by the movement from:
A. point a to point b.
B. point c to point b.
C. D2 to D1.
D. D0 to D1.
Answer: D
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Under price discrimination, a monopolist equates the marginal cost with the average revenues in different markets
a. True b. False Indicate whether the statement is true or false
When a tax is levied on buyers of tea,
a. buyers of tea and sellers of tea both are made worse off. b. buyers of tea are made worse off, and the well-being of sellers is unaffected. c. buyers of tea are made worse off, and sellers of tea are made better off. d. the well-being of both buyers of tea and sellers of tea is unaffected.
Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm earns an accounting profit of ________ and an economic profit of ________.
A. $1,700,000; $500,000 B. $500,000; $200,000 C. $500,000; $1,700,000 D. $1,700,000; $200,000
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.The price of complementary consumer good Y rises. At the same time, government creates subsidies for firms producing X. When both of these occur, what outcome will occur with greatest certainty?
A. decrease D, increase S, decrease P, and effect on Q uncertain. B. decrease D, decrease S, decrease Q, and effect on P uncertain. C. decrease D, increase S, decrease P, and increase Q. D. decrease D, increase S, decrease P, and decrease Q.