Assume a market that has an equilibrium price of $5. If the market price is set at $9, producer surplus:
A. rises for some producers because of the increased price.
B. decreases for some producers because of fewer transactions taking place.
C. Both A and B are true.
D. Neither of these statements is true.
C. Both A and B are true.
You might also like to view...
Which of the following is likely to happen if consumption in an economy falls?
A) Asset prices rise. B) Mortgage defaults fall. C) Labor supply falls. D) Layoffs rise.
The "minimum efficient scale" of operation in an industry is defined as:
A) the smallest plant size that can be operated by firms in the industry. B) the scale of operation at which economies of scale are exhausted. C) the smallest number of firms that could effectively meet demand for an industry's output. D) the scale of operation by firms in an industry that is least efficient.
Under adaptive expectations theory, an increase in the short-run aggregate demand curve ____ the inflation rate and ____ the unemployment rate
a. increases; increases b. increases; decreases c. increases; does not change d. decreases; increases
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.