Producer surplus measures the:
A. wellbeing of sellers
Demand is perfectly inelastic if elasticity is:
D. equal to zero
Markets will always ensure that:
D. none of the above holds true
When a firm operates under conditions of a monopoly, its price is:
C. constrained by demand
A monopoly’s profit can be calculated as:
B. (Price - Average Total Cost) * Quantity
Suppose in a monopolistically competitive market all goods are homogenous. In the short run, the market is most likely to represent:
B. a competitive market
A monopolistically competitive firm chooses:
A. price, but competition in the market determines the quantity
A monopolistically competitive firm chooses its production level the same way as a(n):
D. monopolist
In a two-person repeated game, a tit-for-tat strategy starts with:
A. cooperation and then each player mimics the other player’s last move
Suppose Lee likes chicken curry more than fish and chips. If the price of chicken rises, how would Lee’s demand for fish and chips change?
B. it would increase
Suppose you make jewellery. If the price of gold rises, we would expect you to:
B. be willing and able to produce less jewellery than before at each possible price
A demand curve is:
B. the downward-sloping line relating the price of the good with the quantity demanded
A shortage is:
B. a situation in which quantity supplied is lower than quantity demanded
A decrease in the number of sellers supplying a good will shift the:
A. supply curve to the left
Michele is willing to pay $12 but pays $12.00. Michele’s consumer surplus is:
C. $0
Caitlin would be willing to pay $120 but buys a ticket for $40. Caitlin values the performance at:
B. $120
A consumer’s willingness to pay is:
A. the maximum amount he or she is prepared to pay for a good
In general, elasticity is:
C. a measure of how much buyers and sellers respond to changes in market conditions
A perfectly inelastic demand implies that buyers:
A. will continue to buy the good no matter how big the change in price
When analysing the economic effects of government policies:
B. supply and demand are the most useful tools of analysis
In a perfectly competitive market, no single producer can influence the market price because:
C. many other sellers are offering a product that is essentially identical
