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
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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
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.
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.
For the perfectly competitive firm, the marginal revenue is always
A. Increasing. B. Decreasing. C. Constant. D. Equal to average total cost.