The social surplus in a market is $50. If another economic agent enters the market such that the marginal cost he incurs is $10 and the marginal benefit he receives from the trade is $5, then which of the following statements is true?
A) The social surplus will remain the same.
B) The social surplus will increase by $5.
C) The social surplus will decrease by $5.
D) The social surplus will increase by $10.
C
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The most basic premise of the aggregate expenditures model is that the
A. unemployment level in the economy is inversely related to the inflation rate. B. total output produced in the economy depends directly on the level of total spending. C. level of employment in the economy depends inversely on the real wage rate. D. total output produced depends mostly on the total capacity of firms to produce.
The winner of a second-price sealed-bid auction pays an amount equal to ________
A) half of his bid B) the lowest bid C) the second-highest bid D) his valuation of the good
When the economy reaches a trough in a business cycle, which of the following will occur?
A) Income, production, and employment will begin to rise. B) Income and production will rise, but employment will continue to fall. C) Employment rises, but income and production will continue to fall. D) Income, production, and employment will continue to fall.
In a market that is characterized by imperfect competition,
a. firms are price takers. b. there are always a large number of firms. c. there are at least a few firms that compete with one another. d. the actions of one firm in the market never have any impact on the other firms' profits.