Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
Prior-to-trade (autarky) producer surplus equals area(s)
A. J + I.
B. E + F + J + I.
C. E + F.
D. J.
Answer: C
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The following table shows short-run average total cost schedules for three plants of different sizes that a firm might build in the long run.Plant 1Plant 2Plant 3OutputATCOutputATCOutputATC10$1010$1510$20209201020153083073010409401040850105014509If the three plant sizes shown are the only ones possible, then there are economies of scale in producing up to ________ units of output, and diseconomies of scale after that.
A. 10 B. 20 C. 30 D. 40
According to new growth theorists, more technological improvements can be brought about by
A) the government taking a more active role in regulating industries. B) government policies that lead to increases in human capital. C) tougher immigration laws. D) a government policy that encourages increased consumption.
In the above figure, when the price of pretzels is $3.00 per pound, the total producer surplus from all the pretzels will be
A) zero. B) greater than at any other price. C) less than at any other price. D) the sum of the difference between $3.00 and the marginal cost of all the pounds produced.
According to the quantity theory of money, if the money supply grows at 20 percent and real GDP grows at 5 percent, then the inflation rate will be
A) 15 percent. B) 20 percent. C) 25 percent. D) 100 percent.