The above figure shows supply and demand curves for milk. If the government passes a law that establishes $3 per month as the legal minimum per gallon price, consumer surplus will be
A) a.
B) a + b + f.
C) a + b + c.
D) c + d + g.
A
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Total surplus is the sum of producer’s surplus and consumer’s surplus.
Answer the following statement true (T) or false (F)
The direct cause of the hyperinflation that plagued Zimbabwe in the 2000s is ________
A) printing of too much money by the central bank B) government expenditures greatly above revenues C) outlawing of price increases on many commodities D) allowing the use of foreign currencies E) the issuance of a $100 billion bank note
Why does the AFC curve continue to decline even as the AVC and ATC curves are rising?
a. Fixed costs are not used to calculate average total costs.
b. Fixed costs are being spread over larger volumes of output.
c. Variable costs such as rent tend to decrease over time.
d. Variable costs increase whether output rises or falls.
Which of the following market structures is characterized by the absence of market power?
A. Oligopoly. B. Perfect competition. C. Monopoly. D. Monopolistic competition.