Refer to Figure 9.5. The firm is producing Q units. Which area represents producer surplus?
A. ABCDE
B. EDGF
C. EDCHF
D. ABHF
A. ABCDE
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Bonds with ________ tend to have higher interest rates than bonds with ________
A) high liquidity; low liquidity B) high default risk; low default risk C) shorter maturity; longer maturity D) low tax burdens on their interest; high tax burdens on their interest
Which of the following is not an example of the principle that trade can make everyone better off?
a. Americans buy tube socks from China. b. Residents of Maine drink orange juice from Florida. c. A homeowner hires the kid next door to mow the lawn. d. All of the above are examples of the principle that trade can make everyone better off.
The price of iPhones has fallen dramatically. Which of the following is likely to happen?
A. The quantity of iPhones supplied will decrease. B. The quantity of iPhones supplied will increase. C. The supply of iPhones will decrease. D. The supply of iPhones will increase.
Assume the market price for lemon grass is $4.00 per pound, but most buyers are willing to pay more than the market price. At the market price of $4.00, the quantity of lemon grass demanded is 1,500 pounds per month, and quantity demanded does not reach
zero until the price reaches $30.00 per pound. Construct a graph showing this data, calculate the total consumer surplus in the market for lemon grass, and show the consumer surplus on the graph. Your demand curve should be a straight line. What will be an ideal response?