Refer to Figure 4-11. What is the value of the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor?
A) $1,200 B) $1,500 C) $1,800 D) $3,000
A
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Which would cause an increase in the demand for product A?
a. A decrease in the price of a complementary product B b. A decrease in the number of suppliers of product B c. A decrease in the price of product A d. An increase in the cost of producing product A
Other things equal, if the supply of money is reduced:
A. the demand for money will increase. B. the interest rates will fall. C. bond prices will fall. D. investment spending will increase.
Individuals derive utility from picnics, p, and kayak trips, k. Assuming that an individual's utility is U(p,k) = k0.5p0.5 and income is $100, what is the marginal rate of substitution (MRS) between picnics and kayak trips?
A) MRS = 1. B) MRS = -1. C) MRS = -1/2 D) There is no substitution because picnics and kayak trips are perfect complements.
A. How much is the tax in the above graph? B. How much of this tax is borne by the buyer and how much is borne by the seller? C. As a result of the tax, by about how much does consumption fall?
