Question

In: Economics

69.Total surplus is maximized when the price is _____ the equilibrium price. slightly lower than as...

69.Total surplus is maximized when the price is _____ the equilibrium price.

slightly lower than

as low as possible below

exactly at

71.

If the supply of a good increases while the demand for that good decreases, the equilibrium quantity will

decrease.

be indeterminate.

remain unchanged.

increase.

slightly higher than

73.

Jackie finds a pair of jeans that she likes but the price tag is missing. She is willing to buy them as long as they're not more than $100. The cashier informs Jackie that the price is $72. Jackie buys the jeans, and therefore achieved a consumer surplus of

$72, the price that she actually paid.

$28, the difference between what she was willing to pay and the price.

$100 because that is what she was willing to pay.

$0 because the jeans were not actually discounted.

One country has a comparative advantage in producing a good if its opportunity cost to produce that good is lower than that of another country.

False

True

Expert Solution

Ans.69- exactly at

69.Total surplus is maximized when the price is exactly equal to the equilibrium price. If price is greater than or lesser than equilibrium price then there will be some deadweight loss which will reduce total surplus.

Ans.71- be indeterminate

If supply increases and demand increases then price will unambiguously fall but effect on equilibrium quantity will depend on relative extent of shift of demand and supply curves.

Ans.73- $28, the difference between what she was willing to pay and the price.

Consumer surplus is the difference between the amount that a consumer is willing to pay for the good and the price that he actually ends up paying.

Ans. Given statement is True.

Rahul Sunny answered 2 years ago

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