Producers have an incentive to produce those goods most desired by consumers at the lowest price in
A. a centrally planned economy.
B. a communist economy.
C. a market economy.
D. All of the choices are true.
C. a market economy.
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Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly. Which of the following statements regarding economic surplus in each market structure is true?
A) Under perfectly competitive conditions, economic surplus is equal to consumer surplus; there is no producer surplus because firms are price takers. Under monopoly conditions, economic surplus is equal to producer surplus. B) Under perfectly competitive conditions, economic surplus in this industry is maximized. Under monopoly conditions economic surplus is minimized. C) Under perfectly competitive conditions, economic surplus is maximized. Under monopoly conditions economic surplus is less than under perfect competition and there is a deadweight loss. D) Under perfectly competitive conditions, economic surplus in this industry equals consumer surplus plus producer surplus. Under monopoly conditions, some consumer surplus is transferred to producer surplus, but economic surplus is the same as it was under perfectly competitive conditions.
Price elasticity of supply measures how much the quantity supplied responds to changes in the price
a. True b. False Indicate whether the statement is true or false
Exhibit 6-2 Total utility for hamburgers, fries, and Cokes Total Utilityfrom Hamburgers Total Utilityfrom Fries Total Utilityfrom Cokes 1 hamburger (100 utils) 1 order of fries (30 utils) 1 Coke (40 utils) 2 hamburgers (180 utils) 2 orders of fries (50 utils) 2 Cokes (60 utils) 3 hamburgers (240 utils) 3 orders of fries (60 utils) 3 Cokes (70 utils) In Exhibit 6-2 assume that the price of hamburgers is $2 each, fries cost 50 cents each, and Cokes cost $1 each. What is the marginal utility of having a second order of fries?
A. 10 utils. B. 20 utils. C. 30 utils. D. 50 utils.
If children go to school and become productive members of society,
A) a negative externality is created by the schools. B) a positive externality is created by the schools. C) no externality is created by the schools. D) an externality is created that may be positive or negative.