The demand and supply curves in the market for gasoline are illustrated in the graph below.
Starting at the equilibrium point, if the government imposes a price ceiling of $10, consumer surplus will then be given by the area ________
A. C.
B. A + B.
C. A + D.
D. A.
Answer: B
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Cartel agreements are difficult to sustain because:
A. cartel members do not face the economic incentives inherent in a prisoner's dilemma. B. it's a dominant strategy for each cartel member to cheat on the cartel agreement. C. the collective payoff to all the cartel members is lower when they all abide by the cartel agreement. D. it's usually easy to discover if one of the members has cheated.
In the above figure, the economy is initially at point B. If taxes increase, there is
A) a movement to point C. B) a movement to point A. C) a shift to AD2. D) a shift to AD1.
Assume Alan's budget constraint is demonstrated by line A in the graph shown. Which of the following could cause Alan's budget constraint to change to line B?
A. The price of books could have decreased.
B. The price of books could have increased.
C. The price of movie tickets could have increased.
D. The price of movie tickets could have decreased.
You're buying snacks for an Econ Club meeting. You've been given $100 to spend on chips and soda. You buy 25 bags of chips and 15 sodas. If bags of chips cost $3 each and soda costs $1 each, are you within your budget?
A. No, Over budget by $10 B. Yes, Under budget by $0 C. No, Over budget by $15 D. Yes, Under budget by $10