A consumer values a car at $30,00 . and a producer values the same car at $20,000 . If the transaction is completed at $24,000 . the transaction will generate:
a. No surplus
b. $4,00 . worth of seller surplus and unknown amount of buyer surplus
c. $6,00 . worth of buyer surplus and $4,00 . of seller surplus
d. $6,00 . worth of buyer surplus and unknown amount of seller surplus
c
You might also like to view...
In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does not inflate its costs, then the firm will produce
A) 8 million units and set a price of $21 per unit. B) 12 million units and set a price of $18 per unit. C) 16 million units and set a price of $16 per unit. D) nothing unless the government provides subsidies to cover its losses.
The adverse consequences of debt deflation are most evident ________
A) in the expansion of credit to high-risk borrowers B) on the balance sheets of nonfinancial businesses C) in a sharp decline in the real interest rate D) on the balance sheets of financial businesses
In the long run, firms in a monopolistically competitive market operate:
A. at lowest average total costs possible. B. at full capacity. C. at less than full capacity. D. on an efficient scale.
Which of the following is not true when there is an inflationary gap?
a. Real output exceeds the natural level of real output b. Employment exceeds full employment. c. Unemployment exceeds the natural rate of unemployment. d. All of the above are not true when there is an inflationary gap.