Indifference curves further from the origin imply:
A. a lower level of satisfaction.
B. the same level of satisfaction as any other curve.
C. a higher level of satisfaction.
D. None of the statements is correct.
Answer: C
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If price support policy increases producer surplus more than reducing consumer surplus, then
A) the policy leads to a Pareto-superior allocation. B) the policy leads to an increase in social welfare. C) the policy improves the efficiency of society. D) None of above.
A pharmaceutical company faces a price regulation where it cannot charge any higher than $5,000 for a lifesaving drug. The company knows that the patients put a high value on this product and are willing to pay up to $10,000 for it. The company decides
to sell the drug at $5,000 and receives another $5,000 from administration through their exclusive medical service providers. This is an example of a. Tying b. Bundling c. Exclusion d. Fraud, the company is not allowed to sell for any higher than the regulatory price
Refer to the accompanying figure. In this market, equilibrium price is ________ and equilibrium quantity is ________.
A. $50; 20 B. $25; 10 C. $20; 50 D. $10; 25