In the figure above, an increase in the price of a bag of potato chips would result in the budget line
A) making a parallel shift toward point a.
B) making a parallel shift toward point c.
C) becoming flatter.
D) becoming steeper.
D
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If one producer has control over an entire market and underproduces, the producer will
A) increase producer surplus by lowering pollution costs. B) increase consumer surplus by lowering producer surplus. C) increase both consumer and producer surplus. D) create a deadweight loss. E) decrease the deadweight loss that would exist if the market were efficient.
Refer to Figure 12-9. At price P2, the firm would produce
A) Q2 units. B) Q3 units. C) Q4 units. D) zero units.
The government provides deposit insurance; this insurance protects:
A. depositors for up to $250,000 should a bank fail. B. large corporate deposit accounts, but only the amounts that exceed the $250,000 deductible. C. the deposits that people have, but only for federally chartered banks. D. the deposits of banks in their Federal Reserve accounts.
The consumption schedule shows the relationship of household consumption to the level of:
A. Saving B. Investment C. Disposable income D. The marginal propensity to consume