In Figure 5-18, point D for the consumer
A. will be chosen because total utility is larger there than at point C.
B. would not be chosen because it is less desirable than point C.
C. is unattainable, given the consumer’s budget.
D. has total utility equal to point C.
Answer: C
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Suppose favorable weather resulted in a bumper crop of oranges in Florida. In the market for oranges
A) the supply curve shifted to the right resulting in a decrease in the equilibrium price. B) the demand curve shifted to the right resulting in an increase in the equilibrium price. C) the supply curve shifted to the right resulting in an increase in the equilibrium price. D) the demand curve shifted to the left resulting in a decrease in the equilibrium price.
Historical evidence suggests that monopolization of particular industries had led to lower prices. In such cases the monopolists had reduced profit to increase welfare
Indicate whether the statement is true or false
If a currency decreases in value in response to market forces, this process is known as
a. devaluation. b. depreciation. c. deflation. d. degeneration.
Suppose that this graph describes the current labor market for high school teachers:
Given an initial wage of w*, then immediately following a decrease in supply:
A. the reservation wage of each remaining teacher will fall. B. there will be a shortage of high school teachers. C. there will be an excess supply of high school teachers. D. the equilibrium wage will fall.