Suppose seller X is willing to sell one good X for $5, a second good X for $10, a third for $16, a fourth for $25, and the market price is $20. What is seller X's producer surplus?
A. $15
B. $20
C. $22
D. $29
Answer: D
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In a perfectly competitive market, an increase in market demand
A) raises the price in the short run and attracts new firms in the long run. B) raises the price in the short run and the long run. C) lowers the price in the short run and in the long run. D) has no effect on the price in either the short run or the long run because the firms are price takers.
Suppose the actual and expected price levels in an economy are initially equal. However, the actual price level falls eventually due to a change in economic conditions. Which of the following will occur over the long run?
a. The economy will move rightward along the short-run aggregate supply curve. b. The economy will move leftward along the short-run aggregate supply curve. c. The short-run aggregate supply curve will shift to the right. d. The short-run aggregate supply curve will shift to the left. e. The short-run aggregate supply curve will become flatter.
In economics, the cost of something is?
A. The out-of-pocket expense of obtaining it. B. What you must give up to get it. C. Always measured in units of time. D. Always higher than people think.
When a firm faces a downward-sloping demand curve, marginal revenue
A) must exceed price because the price effect outweighs the output effect. B) is less than price because a firm must lower its price to sell more. C) equals price because the firm sells a standardized product. D) must exceed price because the output effect outweighs the price effect.