Refer to the graph shown. An effective price ceiling at $3 causes consumer surplus to:

A. fall from 130 to 120.
B. increase from 120 to 130.
C. increase from 80 to 120.
D. fall from 110 to 80.


Answer: C

Economics

You might also like to view...

The citizens of a country often refuse to pay voluntarily for defense spending because ________

A) national defense is a common pool resource B) nobody can be excluded from being defended by the state C) all citizens do not derive equal satisfaction from national defense D) national defense is rival in consumption

Economics

Modern statistical methods have created a new branch of economics called

a. microeconomics b. macroeconomics c. econometrics d. abstract economics e. positive economics

Economics

In a price system, changes in prices

A) make it difficult for the system to function well. B) imply that people have made mistakes in the past. C) signal to everyone in the system what goods are relatively more or less scarce. D) signal to policy makers what goods should and should not be taxed more.

Economics

Socialism in theory is an economic system in which:

A. the invisible hand insures that individual decisions are made for the common good. B. individuals are able to act in the best interest of everyone without direction from government or the invisible hand. C. government owns the means of production, but individual self-interest determines how production is organized. D. government sees to it that people work for the common good until they could be relied upon to do that on their own.

Economics