Suppose the domestic market demand function in a certain market where Q is measured in thousands of units is Qd = 20 - 2.5P, and the domestic market supply function is Qs = 2.5P - 7.5. Suppose further that the world price for the good in question is $3.40 per unit. Under conditions of free trade, how much consumer surplus will there be?
A. $26,450
B. $26,650
C. $52,900
D. $53,300
A. $26,450
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The consumption of goods and services has both a money price and a time price
a. True b. False
Which of the following goods is rival in consumption and excludable?
a. a fireworks display b. national defense c. a box of sparklers d. a parade
If a developing country has sufficient reserves, the buying and selling of foreign currency by the central bank is:
A. likely to have a much smaller impact on the exchange rate than in developed countries. B. completely ineffective on the exchange rate. C. likely to have a much greater impact on the exchange rate than in developed countries. D. likely to have roughly the same impact on the exchange rate as in developed countries.
According to real-business-cycle theory:
A. monetary factors affecting aggregate demand cause macroeconomic instability. B. recessions result from declines in long-run aggregate supply, rather than decreases in aggregate demand. C. when real wages fall during recessions, "real" unemployment rates rise. D. the net long-run costs of business fluctuations are severe.