Figure 4-25
Refer to . Consumer surplus before the tax was levied is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.
b
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A significant increase in the price of tennis balls will most likely lead to
A) an increase in the demand for tennis racquets. B) an inward shift in the demand for tennis balls. C) a movement along the demand curve for tennis racquets. D) an inward shift in the demand for tennis racquets.
In a constant-cost industry, the long-run market supply curve is
a. horizontal b. vertical c. upward sloping d. downward sloping e. the same slope as the typical firm's supply curve
In conducting normative analysis, economists apply
A. the principle of comparative advantage. B. the principle of individual sovereignty. C. the law of one price. D. objective value judgments.
The short-run supply curve for a purely competitive industry can be found by:
A. multiplying the AVC curve of the representative firm by the number of firms in the industry. B. adding horizontally the AVC curves of all firms. C. summing horizontally the segments of the MC curves lying above the AVC curve for all firms. D. adding horizontally the immediate market period supply curves of each firm.