According to the graph shown, if the market goes from equilibrium to having its price set at $10 then:
A. producer surplus rises by area B, but falls by area E.
B. producer surplus rises by area B, but falls by area D + E.
C. producer surplus rises by area B + C, but falls by area D + E.
D. producer surplus rises by area B + C, but falls by area E.
A. producer surplus rises by area B, but falls by area E.
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When an industry supply curve increases enough to erase economic profits,
a. weaker firms exit the industry b. quantity demanded decreases, but only slightly c. all firms in the industry incur economic losses d. entry of new firms and expansion of existing firms stop e. marginal revenue increases
Managers experience bounded rationality when they focus narrowly on maximizing their firm's profits and ignore the broader perspective of society's preferences
a. True b. False
If you were told that the exchange rate between the U.S. dollar and the Canadian dollar was 1.2, that would mean that Canadians would have to spend ____ to buy a $12 watch in New York City
a. c and e b. 10 U.S. dollars c. 12 U.S. dollars d. 14.4 U.S. dollars e. 14.4 Canadian dollars
If the gadget industry is a constant cost industry, one would expect that the long run result of an increase in demand for gadget to include ____ firms and a(n) ____ in price. a. more; increase
b. more; no change. c. more; decrease. d. fewer; increase.