Refer to the figure above. What is the producer surplus before Barylia opens up to free trade?
A) $125
B) $250
C) $400
D) $325
C
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A surplus occurs in a market when:
A) demand exceeds supply. B) price is lower than the equilibrium price. C) price is higher than the equilibrium price. D) the marginal cost of production is negligible.
In a market with asymmetric information, hidden actions exist if:
A) the buyer or the seller takes actions that are relevant for but not observed by, the other party. B) the production or consumption of the good being transacted gives rise to positive externalities. C) the production or consumption of the good being transacted gives rise to negative externalities. D) the production of the good being transacted involves a huge opportunity cost.
Figure 7-5
Which of the graphs in Figure 7-5 could be a firm’s total fixed cost curve?
A. (a) B. (b) C. (c) D. (d)
Steve likes to buy comics and games every month. He recently got a pay raise, so he has $20 more to spend each month. If comic books are inferior goods and games are normal goods, then Steve will buy: a. more comics and games
b. more comic books but may buy the same or a smaller quantity of games c. more games but may buy the same or a smaller quantity of comics. d. the same amounts of games and comics.