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Producer surplus is measured as the area
Correct answer(s):
- above the supply curve and below the market price.
If supply increases, then the
Correct answer(s):
- equilibrium price goes down.
If demand increases, then the
Correct answer(s):
- demand curve shifts to the right.
The minimum wage
Correct answer(s):
- is an example of floor price.
A floor price is
Correct answer(s):
- the minimum legal price that can be charged in a market.
When an effective price ceiling is in place
Correct answer(s):
- some consumers are better off and others are worse off.
Under a price ceiling, the full economic price is
Correct answer(s):
- higher than the free-market price.
A price ceiling is
Correct answer(s):
- the maximum legal price that can be charged in a market.
Competitive market equilibrium
Correct answer(s):
- is determined by the intersection of the market demand and supply curves.
When quantity demanded exceeds quantity supplied
Correct answer(s):
- the price is below the equilibrium price.
Producer surplus is the
Correct answer(s):
- area above the supply curve but below the market price of the good.
If an excise tax is imposed on a good, then the supply curve
Correct answer(s):
- shifts up by the amount of the tax.
The supply function
Correct answer(s):
- recognizes that the quantity of a good produced depends on its price and supply shifters.
If firms expect prices to be higher in the future and the product is not perishable, then
Correct answer(s):
- he current supply curve shifts to the left.
An ad valorem tax shifts the supply curve
Correct answer(s):
- by rotating it counter-clockwise.
An excise tax shifts the supply curve
Correct answer(s):
- up by the amount of the tax.
As additional firms enter an industry, the market supply curve
Correct answer(s):
- shifts to the right.
If the price of an input rises, producers are willing to produce
Correct answer(s):
- less output at each given price.
Which of the following is not a supply shifter?
Correct answer(s):
- Average income level.
The market supply curve indicates the total quantity all producers in a competitive market would produce at each price,
Correct answer(s):
- holding all supply shifters fixed.