The demand and supply curves in the market for gasoline are illustrated in the graph below.
Starting at the equilibrium point, if the government imposes a price ceiling of $10, producer surplus will fall by an amount given by the area ________
A. B + E.
B. B + C.
C. C.
D. A.
Answer: A
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Under a relative concept of poverty, poverty
A. doesn’t really exist. B. is higher in rich countries than in poor countries. C. can never be wholly eliminated by public policy. D. declines as technology advances.
A tax accounting firm produces 500 tax returns units when the market price is $150 per return and produces 700 tax returns when the market price is $170 per tax return. Using the midpoint method, for this range of prices, the price elasticity of supply is about
a. 2.67. b. 0.67. c. 0.4. d. 0.125.
In the early 2000s, Chinese officials indicted members of a forgery syndicate that sold several hundred diplomas to high school graduates who needed the diplomas to take employment tests. This situation, where having the certificate of knowledge is more important than the knowledge itself, is known as:
A. the brain drain. B. human capital. C. certification. D. credentialism.
Suppose Brad Pitt and Angelina Jolie wear matching platinum jewelry in their new movie. After the movie is released, suppose that consumers increase their demand for the jewelry and at the same time manufacturers increase the supply of the jewelry. As a result
A) the equilibrium quantity will increase, and there is an indeterminate change in the equilibrium price. B) the equilibrium quantity and price are both indeterminate. C) the equilibrium quantity will decrease, and the equilibrium price will increase. D) the equilibrium price and quantity will both decrease.