If the market for bicycles is efficient, then
A) no more bicycles can be produced.
B) marginal benefit exceeds marginal cost.
C) consumer surplus must be greater than producer surplus.
D) it is not possible to produce more bicycles without sacrificing another, more highly valued good.
E) consumer surplus must equal producer surplus.
D
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If good A had twice as many good substitutes as good B, but good B consumed twice the amount of a buyers income as good A, goods A and B would have the same elasticity of demand
a. True b. False Indicate whether the statement is true or false
Suppose the equilibrium price of textbooks is $40 a textbook. At that price, the quantity of textbooks demanded and supplied is 20,000. If a $5 tax per textbook paid by consumers increases the price paid by consumers to $42 a textbook and reduces the equilibrium quantity sold to 18,000, elasticity of:
A. supply is 1.3 and elasticity of demand is 2.0. Suppliers pay a larger portion of the tax. B. demand is 0.7 and elasticity of supply is 0.5. Consumers pay a smaller portion of the tax. C. supply is 0.7 and elasticity of demand is 0.5. Suppliers pay a smaller portion of the tax. D. demand is 1.3 and elasticity of supply is 2.0. Consumers pay a larger portion of the tax.
Refer to the information in the table. The amount of currency held by the public ________, and the amount of reserves held by banks ________. It must be the case that, in 1932, the Federal Reserve ________. Currency held by public (in billions)Reserve-deposit ratioBank reserves (in billions)Money supply (in billions)December 1931$4.590.095$3.11$37.3December 1932$4.820.109$3.18$34.0
A. increased; also increased; increased the discount rate B. decreased; also decreased; kept the rate of inflation low C. increased; also increased; injected reserves into the economy D. decreased; increased; performed open-market operations
Which of the following is not an assumption of perfect competition?
A. Powerful buyers B. Freedom of exit C. Identical (or indistinguishable) products D. Freedom of entry