According to the graph shown, consumer surplus is:
A. $15.
B. $20.
C. $30.
D. $10.
Answer: A
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Suppose that a technological decline makes labor less productive. What is likely to happen to wages and to potential output?
A) Wages decrease and potential output increases. B) Wages increase and potential output decreases. C) Wages increase and potential output increases. D) Wages decrease and potential output decreases.
For which of the following questions would consumer sovereignty provide an answer?
a. Will a shovel or bulldozer be used to excavate the ground? b. Should the government provide trash collection services in the community? c. Should we have universal health coverage provided by the government? d. Will large or small cars sell the most this year? e. Should there be numerous competitors offering long-distance phone service to the consumer?
A principle of Islamic economics is:
a. prohibition of charity b. give charity only to the state c. charge interest equal to risk d. prohibition of interest e. all of the above
Consider the Cobb-Douglas production function F(L,K) = AL?K?. Suppose that ? = 2, ? = 3, the firm has 3 units of capital and the firm's general productivity level is 20. (a) What is the firm's long-run production function? (b) What is the firm's short-run production function? (c) If the firm employs 10 workers, what are the marginal products of labor and capital? (d) If the firm employs 10 workers, what is the marginal rate of technical substitution for labor with capital? (e) Does this firm's technology exhibit increasing, decreasing or constant returns to scale?
What will be an ideal response?