Q:56 a/. Suppose consumer income increases. If iPods are normal goods, the equil
ID: 1252619 • Letter: Q
Question
Q:56
a/. Suppose consumer income increases. If iPods are normal goods, the equilibrium price of an iPod will ________, and producer surplus in the iPod marked will ________.
A) decrease; decrease
B) increase; increase
C) decrease; increase
D) increase; decrease
E) None Of The Above
b. An economically efficient output level is achieved when
A) the marginal benefit of the last unit produced equals the marginal cost of producing that unit.
B) the marginal benefit of the last unit produced is greater than the marginal cost of producing that unit.
C) the marginal benefit of the last unit produced is less than the marginal cost of producing that unit.
D) total benefit must exceed total cost.
E) None Of The Above
c. Suppose the price of cotton falls. In the market for garments, the equilibrium price will ________ and the consumer surplus in the garment market will ________.
A) decrease, decrease
B) increase, increase
C) decrease, increase
D) increase, decrease
E) None Of The Above
d. What is the term that defines a legally established maximum price that may be charged for a product?
A) price floor
B) price ceiling
C) subsidy
D) tariff
E) None Of The Above
e. For a price ceiling to be binding, it must
A) be set above the free market equilibrium price.
B) be set below the free market equilibrium price.
C) coincide with the free market equilibrium price.
D) Any of the above can be true.
E) None Of The Above
Explanation / Answer
a.) D b.) A c.) C d.) B e.) B
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