Consumer surplus equals the
a. value to buyers minus the amount paid by buyers.
b. value to buyers minus the cost to sellers.
c. amount received by sellers minus the cost to sellers.
d. amount received by sellers minus the amount paid by buyers.
a
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Products X, Y, and Z have price elasticities of 3.0, 0.80, and 1.0 respectively. Total revenue decreases if the price of
A) product X falls. B) product Y falls. C) product Z falls. D) product X or product Z falls. E) product Y or product Z falls.
An analysis of market failure and government failure indicates
a. government decision making is always preferable to using markets. b. market decision making is always preferable to public-sector action. c. government action is necessary whenever market failure occurs. d. both the market and the government may fail to meet conditions of economic efficiency; in each individual case, the choice of market or public-sector action requires careful evaluation.
Can purchasing-power parity be used to explain the fact that the U.S. dollar depreciated by more than 50 percent against the German mark between 1970 and 1998, but appreciated by more than 100 percent against the Italian lira during the same period? Defend your answer
A price-setting firm faces the following estimated demand and average variable cost functions:Qd = 800,000 - 2,000P + 0.7M + 4,000PRAVC = 500 - 0.03Q + 0.000001Q2where Qd is the quantity demanded, P is price, M is income, and PR is the price of a related good. The firm expects income to be $40,000 and PR to be $53. Total fixed cost is $2,600,000. What is the estimated marginal revenue function for the firm?
A. MR = 520 - 0.001Q B. MR = 1,600 - 0.004Q C. MR = 800 - 0.002Q D. MR = 800 - 0.004Q