For a given market demand curve, if the market clearing price increases, then the amount of producer surplus will
A. become negative.
B. increase.
C. decrease.
D. None of these due to insufficient information.
Answer: B
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Claude's Copper Clappers sells clappers for $65 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $65, average variable cost is $45, and average total cost is $67 . To maximize his profit or minimize his loss, Claude should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price
Suppose you earn $50 a week at your job. You like to go to movies and have dinner with friends. Movies cost $15 each and dinner is $20 each time you eat out. Which of the following combinations is attainable given your weekly budget?
A. 2 dinners and 2 movies B. 4 movies C. 2 movies and 1 dinner D. 3 dinners
A decrease in marginal tax rates will cause entrepreneurship to ________ and AS to shift to the ________.
A. decrease; right B. increase; left C. decrease; left D. increase; right
What is the term that refers to increases in the value of a product to each user, including existing users, as the total number of users increases?
A. Price discrimination B. Network effects C. Simultaneous consumption D. Income transfer