Assume the market was in equilibrium in the graph shown. If the market price gets set to $7, which of the following is true?
A. Some producers lose surplus, but total surplus rises.
B. Some producers gain surplus, but total surplus falls.
C. Some consumers lose surplus, but total surplus rises.
D. Some consumers gain surplus, but total surplus falls.
Answer: D
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Which of the following is an example of a long-run adjustment?
A) Wal-Mart builds another Supercenter. B) A soybean farmer turns on the irrigation system after a month long dry spell. C) Your university offers Saturday morning classes next fall. D) Ford Motor Company lays off 2,000 assembly line workers.
Imports ________ society's total surplus because of the ________ in price and ________ in consumption
A) increase; rise; increase B) increase; rise; decrease C) decrease; fall; increase D) decrease; fall; decrease E) increase; fall; increase
The first difference of the logarithm of Yt equals
A) the first difference of Y. B) the difference between the lead and the lag of Y. C) the approximately the growth rate of Y when the growth rate is small. D) the growth rate of Y exactly.
Suppose there is a tornado that levels a city. As rebuilding begins, how might you analyze this effect in the market for lumber?
A. The demand for lumber would increase, increasing both the equilibrium price and quantity. B. The supply of lumber would increase, decreasing the equilibrium price and increasing the equilibrium quantity. C. The demand for lumber would increase, decreasing the equilibrium price and increasing the equilibrium quantity. D. The supply of lumber would decrease, increasing the equilibrium price and decreasing the equilibrium quantity.