1. All else equal, an increase in supply will cause an increase in consumer surp

Question

1. All else equal, an increase in supply will cause an increase in consumer surplus.

2. When demand increases so that market price increases, producer surplus increases because (1) producer surplus received by existing sellers increases, and (2) new sellers enter the market.

3. Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

4. The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

5. When a good is taxed, the tax revenue collected by the government equals the decrease in the welfare of buyers and sellers caused by the tax.

6. If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.

7. For a typical firm, fixed costs increase in direct proportion to the increases in output.

8. The stable, long-run equilibrium in a competitive market occurs when the market price equals the lowest point on a firm%u2019s average total cost curve.

9. A monopolist produces an output level where marginal revenue equals marginal cost and charges a price where marginal cost equals average total cost.

10. Deadweight loss measures the loss in society%u2019s welfare that occurs because a monopolist does not produce the socially efficient level of output.

11. If the government imposes a $3 tax in a market, the equilibrium price will rise by $3.

12.The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Explanation / Answer

1.TRUE

2.TRUE

3.FALSE

4.FALSE

5.FALSE

6.FALSE

7.TRUE

8.TRUE

9.FALSE

10.TRUE

11.TRUE

12.TRUE

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