Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.Equilibrium in this market occurs at the intersection of curves S and D.
Figure 4.6Refer to Figure 4.6. If price goes from equilibrium to P1, producer surplus changes by the area
A. B - F.
B. E + F.
C. C + E
D. E - C.
Answer: B
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Managers should concentrate on maximizing shareholder value alone if which of the following conditions are met?
a. complete markets b. no significant asymmetric information c. known recontracting costs d. all of the above e. none of the above
Figure 10-6
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In Figure 10-6, if the current market price is at $10, then in the long-run equilibrium
A. each firm will be producing a smaller output. B. the market price will rise to $20. C. the number of firms in the market will increase. D. All of these responses are correct.
The wealth effect:
A. explains the downward-sloping aggregate demand curve. B. is the positive relationship between consumer spending and the overall price level. C. is not present when wages keep pace with inflation. D. explains how the aggregate demand curve shifts.
The price elasticity of supply
a. will be positive when supply is elastic and negative when it is inelastic. b. will be negative when supply is elastic and positive when it is inelastic. c. will always be positive. d. will be positive when demand for the good is inelastic. e. will be positive when demand for the good is elastic.