Which of the following is NOT true about price floors?
A) Consumer surplus is always lower than it would be in the competitive equilibrium.
B) Producer surplus could be lower, higher, or the same as it would be in competitive equilibrium.
C) Producer surplus could be negative as the result of a price floor.
D) Producers will often respond to a price floor by cutting production to the point at which price equals marginal cost.
E) The total producer surplus depends on how producers respond to the price floor in determining their output level.
D
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A production possibilities curve always slopes downward to the right because resources
A. are not scarce. B. have no opportunity cost. C. are freely available. D. are limited. E. are not related to outputs.
Which of the following statements correctly differentiates between the slope of the demand curve and price elasticity of demand along a linear demand curve?
A) The price elasticity of demand for a good is the same at different points on the demand curve, whereas the slope of the demand curve varies depending on the point where it is measured. B) The price elasticity of demand for a good varies along the demand curve, whereas the slope of the demand curve remains the same at different points on the curve. C) The price elasticity of demand is a ratio, whereas the slope of a demand curve is a product. D) The price elasticity of demand is a product, whereas the slope of a demand curve is a ratio.
The typical relationship between a worker's productivity and the worker's wage rate is
A) high productivity workers receive low wage rates. B) low productivity workers receive low wage rates. C) no link between productivity and wages earned. D) high productivity workers find that their jobs are often outsourced. E) that workers with high productivity need to have their high wages protected by tariffs.
If a country has a floating exchange rate, it means their currency:
A. is set by the government. B. has a value determined by the market for loanable funds. C. can be freely traded and their value is determined by the market. D. All of these statements are true.