The benefit from an additional unit of a good or service that the consumer of that good or service receives is the
A) marginal private benefit.
B) marginal external benefit.
C) marginal social benefit.
D) opportunity cost.
Ques. 2The substitution effect from a rise in the price of pizza
A) leads to a movement along the fixed budget line, due to a change in relative prices.
B) increases the quantity demanded of pizza.
C) decreases the quantity demanded of pizza.
D) Both answers A and B are correct.
Ques. 3The most prevalent market structures in the U.S. economy are perfect competition and monopolistic competition.
Indicate whether the statement is true or false
Ques. 4Agave, Six Feet Under, Globe, Silk, Sotto Sotto and Zocalo are all restaurants in Atlanta. Suppose at the profit maximizing quantity, Zocalo charges 22 for each dinner entre, and its ATC is equal to 24. What should Zocalo do?
A) Cannot determine whether Zocalo should stay open or shut down in short run, but Zocalo should go out of business in the long run.
B) Produce in the short run and go out of business in the long run.
C) Shut down in the short run and go out of business in the long run.
D) Cannot determine whether Zocalo's should stay open or shut down in the short or long run.
Ques. 5Studies show that smoking cigars is inversely related to income. Thus cigars are an inferior good.
Indicate whether the statement is true or false
Ques. 6Which area in the above figure equals the consumer surplus under perfect price discrimination?
A) A + B + C + D + E + F + G + H
B) A + B + C + D + E
C) A + B
D) There is no consumer surplus.
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