The concept of elasticity of supply measures the responsiveness of the
A) quantity supplied to a change in the price.
B) price to a change in the quantity supplied.
C) quantity supplied to a change in the quantity demanded.
D) quantity demanded to a change in the quantity supplied.
Ques. 2In the table above, the deadweight loss is zero when ________ umbrellas are produced and sold.
A) 20
B) 40
C) 60
D) 80
Ques. 3Lizzie's budget line is shown in the figure above. If the price of a cookie rises, Lizzie's real income in terms of cookies ________ and her real income in terms of magazines ________.
A) decreases; increases
B) increases; decreases
C) decreases; does not change
D) increases; does not change
Ques. 4An equilibrium in game theory in which the players make and share the monopoly profit is called
A) the Nash equilibrium.
B) the cooperative equilibrium.
C) a contestable market equilibrium.
D) limit pricing.
Ques. 5Private markets will not provide the efficient quantity of a public good because
A) of the principle of minimum differentiation.
B) public goods are rival and excludable.
C) of rational ignorance.
D) of the free-rider problem.
Ques. 6The above figure shows the demand and cost curves for a firm in monopolistic competition. The firm maximizes its profit by
A) producing 8 units at a price of 5 each.
B) producing 8 units at a price of 15 each.
C) producing 4 units at a price of 20 each.
D) producing 12 units at a price of 10 each.