Consider the monopoly in the figure below with price regulated at $2 per unit. Consumer surplus at the regulated price is: 
A. $4.50.
B. $9.
C. $8.
D. There is insufficient information to determine consumer surplus.
Answer: A
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Once a bargain has been reached and involved parties have agreed to an arrangement, there is no need for either party to monitor and enforce the agreement
Indicate whether the statement is true or false
According to the graph shown, the long-run output decision for this firm is:
This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
A. Q1, P1.
B. Q1, P2.
C. Q2, P1.
D. Q3, P3.
In most derivations of the aggregate expenditures model, investment is assumed to be independent of real GDP. What would be the effect on the aggregate expenditures (AE) function if investment spending were positively related to income?
a. The intercept of the AE function would rise. b. The slope of the AE function would become flatter. c. Both the slope and the intercept of the AE function would increase. d. The slope of the AE function would become steeper. e. The intercept of the AE function would increase, and its slope would become flatter.
If Pizza Hut decreases its price for a large pizza by 25% and this leads to a 75% increase in sales, we can conclude that demand is relatively elastic with regard to price over that range
a. True b. False Indicate whether the statement is true or false