In the above figure, if the price is 1.25 per gallon of milk and 5 million gallons are produced and ...

In the above figure, if the price is 1.25 per gallon of milk and 5 million gallons are produced and consumed, then the consumer surplus is ________ and the producer surplus is ________.
 
  A) 3.125 million; 3.125 million
  B) 12.5 million; 12.5 million
  C) 6.25 million; 6.25 million
  D) None of the above answers are correct.

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Ques. 2

The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city.
 
  If the marginal external cost is 10 per ton at every quantity of steel produced, the equilibrium quantity when the steel industry is unregulated is ________ tons per week. A) 5
  B) 15
  C) 20
  D) 25

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Ques. 3

If firms in a monopolistically competitive industry are making an economic profit, then
 
  A) some customers will exit the market.
  B) some workers will leave the industry's labor force.
  C) some firms will leave the industry.
  D) new firms will enter the industry.

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Ques. 4

Refer to the payoffs in the table above. Sears and Wal-Mart must decide whether to lower their prices based on the profits shown in the table. This game has
 
  A) no Nash equilibrium.
  B) a Nash equilibrium: Sears keeps its prices high and Wal-Mart lowers its prices.
  C) a Nash equilibrium: both Sears and Wal-Mart keep prices high.
  D) a Nash equilibrium: both Sears and Wal-Mart lower prices.

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Ques. 5

Assume the equilibrium price level is 140 and the equilibrium real GDP is 15 trillion. What happens if the current price level equals 125?
 
  What will be an ideal response?

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Ques. 6

Nominal GDP, PY, is 7.5 trillion. The quantity of money is 3 trillion. The velocity of circulation is
 
  A) 22.5.
  B) 10.5.
  C) 2.5.
  D) 3.

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Ques. 7

A 10 per-unit tax on cell phones raises the equilibrium price paid by consumers by 5. Before the tax, 5,000 cell phones were sold per year. The revenue from the tax is
 
  A) zero.
  B) positive but less than 50,000 per year.
  C) 50,000 per year.
  D) more than 50,000 per year.

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Ques. 8

The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is positive if it produces between
 
  A) 0 and 5 units.
  B) 0 and 15 units.
  C) 0 and 20 units.
  D) 5 and 20 units.