When the price of a good is below its equilibrium level under perfect competition,
A. consumers would benefit from an expansion of output.
B. some consumers are earning larger consumer’s surpluses than they would in equilibrium.
C. the market is not operating at maximum efficiency.
D. All of the responses are correct.
Answer: D
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If tax revenue is $230 billion and the government's outlays are $235 billion, then the budget
A) deficit is $5 billion, and government debt will remain the same. B) surplus is $5 billion, and government debt will increase by $5 billion. C) deficit is $5 billion, and government debt will increase by $5 billion. D) deficit is $5 billion, and government debt will decrease by $5 billion. E) surplus is $230 billion, and the budget deficit is $235 billion.
Which of the following is an example of moral hazard?
A) I hire you to work in my garden for a fixed fee, and you work hard all day. B) I hire you to work at an hourly rate and you work as slowly as possible. C) You apply for the job only because I pay a fixed wage per day, no matter how much or little you do. D) You agree to be paid by the weed to work in my garden, and then don't work hard.
Which of the following is consistent with diminishing marginal product? a. The more you study each day, the more you learn from each added hour of study
b. The more you study each day, the less you know. c. Beyond some point, each added hour studying each day adds less to what you know than the previous hour's study. d. None of the above.
Which of the following is a fundamental topic addressed by microeconomics?
A) whether to extend unemployment insurance B) determining how many new iPhones the Apple company should produce C) the level of inflation in the country D) the impact of interest rates on savings in the economy