Exhibit 4-9 Data on supply and demand
Price
QuantityDemanded
QuantitySupplied
$2.00
100
300
1.50
150
250
1.00
200
200
0.50
250
150
In Exhibit 4-9, if a price ceiling is set at $1.50 the market result after adjustment is:
A. a shortage of 150 units.
B. a surplus of 100 units.
C. shortage of 100 units.
D. equilibrium at 200 units.
Answer: D
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In maximizing economic profit, the monopolist will
A) choose the highest price that still permits some output sales. B) equate marginal cost to minimum average total cost. C) equate price to marginal cost. D) equate marginal revenue to marginal cost.
If marginal cost is rising, then average cost must be rising
a. True b. False Indicate whether the statement is true or false
The market supply of labor curve is:
A. upward sloping. B. upward sloping if the income effect dominates and downward sloping if the substitution effect dominates. C. downward sloping if the income effect dominates and upward sloping if the substitution effect dominates. D. perfectly inelastic.
Refer to Figure 9.8. If free trade in sugar is allowed, consumer surplus will be
A) $175. B) $250. C) $30,625. D) $61,250. E) $62,500.