Suppose a Downward-Sloping Demand Curve Intersects the Horizontal Axis at a Point
Suppose a downward-sloping demand curve intersects the horizontal axis at a point where quantity demanded equals 1250 units.What is the ʺvalueʺ that consumers place on the 1250th unit of this good?
A)a negative value
B)a positive value
E)it depends on the position of the supply curve
Suppose a negatively sloped demand curve and a positively sloped supply curve intersect at a price and quantity combination of $100 and 600 units of the good.But suppose that producers actually produce and sell 610 units.What can we correctly say about market efficiency in this case?
A)The value placed on the final 10 units of the good by consumers exceeds the additional costs associated with their production this market is not efficient.
B)The production and consumption of the additional 10 units of the good increases total economic surplus and increases market efficiency.
C)This market is efficient because economic surplus is maximized as production and consumption increase simultaneously.
D)This market is not efficient because quantity demanded for the good exceeds quantity supplied.
E)The value placed on the final 10 units of the good by consumers is less than the additional costs associated with their production this market is not efficient.
When economists describe a market for a specific product as being economically ʺefficient,ʺ what do they mean?
A)Production techniques are such that resources are used in the most technologically efficient manner.
B)Consumption of the product is such that economic surplus is maximized.
C)Production of the product is such that economic surplus is maximized.
D)The quantity of the product produced and consumed is such that the economic surplus is maximized.
E)There are no price controls in place in that market.
Consider a competitive market for good X.A binding price floor and a binding price ceiling in this market would be similar to each other in that
A)each type of price control will lead to a reduction in deadweight loss and therefore an increase in efficiency in the market for good X.
B)the units of good X that will no longer be produced or consumed will not generate any economic surplus.
C)each type of price control results in a higher price paid by consumers,and therefore to a reduction in economic surplus.
D)each type of price control results in a lower price received by sellers,and therefore to a reduction in economic surplus.
E)additional units of good X will be produced and consumed,leading to an increase in economic surplus.