In order to be binding, a price floor
A) must lie below the free-market equilibrium price.
B) must coincide with the free-market equilibrium price.
C) must be high enough for firms to earn a profit.
D) must lie above the free-market equilibrium price.
D
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Total revenue
A. can be calculated directly from the demand curve. B. can be calculated directly from the average revenue curve. C. is found by multiplying price times quantity. D. All of the responses are correct.
PlayStations and PlayStation games are complementary goods. A technological advance in the production of PlayStations will
a. increase consumer surplus in the market for PlayStations and decrease producer surplus in the market for PlayStation games. b. increase consumer surplus in the market for PlayStations and increase producer surplus in the market for PlayStation games. c. decrease consumer surplus in the market for PlayStations and increase producer surplus in the market for PlayStation games. d. decrease consumer surplus in the market for PlayStations and decrease producer surplus in the market for PlayStation games.
Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will:
A. decrease, quantity demanded will decrease, and quantity supplied will increase. B. decrease and quantity demanded and quantity supplied will both decrease. C. decrease, quantity demanded will increase, and quantity supplied will decrease. D. increase, quantity demanded will decrease, and quantity supplied will increase.
Refer to the graph shown. Destruction of some of the resources necessary to produce both guns and butter would result in what movement?
A. From X to Y to X to Z in diagram b. B. From C to D to A to B in diagram a. C. From A to B to C to D in diagram a. D. From X to Z to X to Y in diagram b.