Refer to the accompanying figure. Suppose the dairy lobby convinces the government to impose price controls in this market. If the government requires cheese to be sold for a price of $8 per pound, total consumer surplus in the market would equal:

A. $120 per day.
B. $20 per day.
C. $60 per day.
D. $80 per day.


Answer: B

Economics

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The figure above provides information for a factory that produces chemicals that pollute a waterway. The waterway is used by water skiers. If the waterway is owned by a water ski club and the Coase theorem applies, then the factory will produce ________ tons of chemicals a week.

A) 1 ton B) as many tons as possible C) 3 tons D) 5 tons

Economics

Suppose Congress enacts investment tax credits to spur more business investment. What impact would this have on the loanable funds market?

a) There would be an increase in supply; the supply curve shifts right. b) There would be a decrease in supply; the supply curve shifts left. c) There would be an increase in demand; the demand curve shifts right. d) There would be a decrease in demand; the demand curve shifts left.

Economics

In the classical range of the aggregate supply curve, greater spending for consumer and investment goods results in:

A. stagflation. B. more unemployment. C. greater output. D. a higher price level.

Economics

For the perfectly competitive firm, the marginal revenue is always

A. Increasing. B. Decreasing. C. Constant. D. Equal to average total cost.

Economics