Suppose an individual demand curve is given by P = 100 - 5Q, where P is the price of smoothies and Q is the quantity she consumes. Assuming her income per week is $1,000 and the current price of smoothies is $5 each, by how much will her consumer surplus decline if the price of smoothies increased to $10 each?
A. $810
B. $25
C. $950
D. $92.5
Answer: D
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Comparing the United States economy in the 1920s with the economy in the 1990s, both decades
A. had slow economic growth. B. had a lack of any government regulation of the stock market. C. suffered from economic depressions. D. had soaring stock markets.
When quotas are eliminated, losers include
A. Domestic producers. B. There are no losers when free international trade is established. C. Foreign producers. D. Domestic consumers.
A natural monopoly has no incentive to limit its costs of production under which type of regulation?
A. Social regulation. B. Output regulation. C. Profit regulation. D. Price regulation.
Refer to Excise Subsidy. The deadweight loss created by the subsidy is represented by
The following questions refer to the accompanying diagram which shows the effects of an excise subsidy given to firms. The initial price and quantity are P0 and Q0, respectively. After the subsidy is granted, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.
a. area F + G.
b. area D + G + J.
c. area C.
d. area D.