Refer to the graph shown. An effective price floor at Pf causes consumer surplus to:
A. change from areas A + B + E to areas A + B + C.
B. fall from areas C + D + F to area D.
C. fall from areas A + B + E to area A.
D. change from areas C + D + F to areas B + C + D.
Answer: C
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When the price of a Caesar salad is $5.00, the demand for Caesar salads is elastic, and when the price is $4.00, the demand is inelastic. If Mike's Roadside Restaurant cuts the price from $5.00 to $4.00, its total revenue from Caesar salads ________
A) will increase B) will decrease C) will remain the same D) might increase, decrease, or remain the same
An important market for overnight borrowing and lending is the
A) commercial paper market. B) repo market. C) Treasury bill market. D) Treasury bond market.
Which of the following conveys the correct relationship between production and inventories?
A. If planned inventories > actual inventories then increase production. B. If planned inventories < actual inventories then decrease production. C. There is not clear relationship between inventories and production. D. If planned inventories > actual inventories then reduce production.
If an economy is producing at a point on the production possibilities curve it represents: a. full employment of existing resources. b. the gains from trade that an economy can enjoy
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