Which of the following statements is not correct?
A. Total surplus is the sum of consumer and producer surplus.
B. Deadweight loss is the net loss of both consumer and producer surplus resulting from underproduction or overproduction of a product.
C. Deadweight loss is a measure of market inefficiency.
D. Total surplus is maximized when the actual quantity supplied exceeds the equilibrium quantity.
Answer: D
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Letters are used to represent the terms used to answer this question: price (P), quantity of output (Q), total cost (TC) and average total cost (ATC). Which of the following equations is equal to a firm's average profit?
A) P - TC B) P - ATC C) (P - ATC) × Q D) (P × Q) - TC
Figure 10-5
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Figure 10-5 shows the short-run cost relationships for a perfectly competitive firm. Based on this diagram, which point would not be on the firm’s short-run supply curve?
A. D B. B C. C D. H
Which of the following will most likely result from an unanticipated decrease in aggregate supply due to unfavorable weather conditions in agricultural areas?
What will be an ideal response?
Kyle works for a perfectly competitive firm where he receives a wage rate of $15. From this, one can infer that:
A. Kyle's reservation wage is $15. B. Kyle's value of marginal product is at least $15. C. the price of the firm's output is at least $15. D. Kyle's marginal product is at least $15.