Market equilibrium maximizes the total surplus in market

Assignment Help Business Economics
Reference no: EM131246073

1. Recall the application on rent control and mismatches. Under rent control, the government sets a maximum price for housing, decreasing the quantity supplied and the total value of the market. Rent control and other maximum prices cause ________ possibly ________.

A) inefficiency; mismatches.

B) efficiency: mismatches

C) mismatches: equilibrium

D) none of the above

2. Market equilibrium maximizes the total surplus in a market and therefore it is efficient.

A) True

B) False

3. Market equilibrium guarantees that all mutually beneficial transactions take place.

A) True

B) False

4. A maximum price below the market equilibrium price will lower the total surplus of the market.

(A) True

(B) False

5. Do price controls reduce the total surplus of a market because they prevent mutually beneficial transactions? Yes or No? Explain your answer.

Reference no: EM131246073

Questions Cloud

Assumed to be competitive and initially in equilibrium : Please show how labor markets (assumed to be competitive and initially in equilibrium) are affected by the following changes. Clearly explain your reasoning. Labor market for math and science teachers. Wages available in private industries utilizing ..
Was the project a success why or why not : Answer the following in a summarizing, final page: Was the project a success? Why or why not? If not, were portions of the project a success, and what was the impact of those success areas on the overall determination of project success
Demand curve for desktop computers shift rightward : If both producers and consumers believe that a product's price will rise in the future, then at the present, the equilibrium price. If the demand curve for desktop computers shift rightward and at the same time the supply curve shifts leftward, then
What team leader management style would be most effective : Based on your research within the article and textbook, as well as your own experience, what team leader management style would be most effective in leading a team in which you were a member
Market equilibrium maximizes the total surplus in market : Market equilibrium maximizes the total surplus in a market and therefore it is efficient. Market equilibrium guarantees that all mutually beneficial transactions take place. A maximum price below the market equilibrium price will lower the total surp..
Draw a decision tree for the decision that buyu faces : Discuss the potential profit of manufacturing all 200,000 boards now. Draw a decision tree for the decision that BUYU faces. If BUYU uses its expected profit as the basis for its decision, determine the preferred course of action
What would monopoly marginal revenue : What would a monopoly’s marginal revenue be if it chose a point on the demand curve where the price elasticity of demand equals −1? Why would it never be optimal to choose such a point, given positive marginal costs? Would the monopoly rather produce..
What must the market value be at the end of four years : It is estimated that a certain piece of equipment can save $6,000 per year in labor and material cost. You can buy a machine for $100,000 that will produce a net income, after operating expenses of $10,000 per year. If you plan to keep the machine fo..
Explain the measurement scales that the study used : Find a scholarly research study from the Ashford University Library that uses measurement scales for data collection (e.g., a survey). Explain the measurement scales that the study used, and evaluate them

Reviews

Write a Review

Business Economics Questions & Answers

  According to the quantity theory of money

Substantially dependent on minimally dependent on  totally dependent on independent of

  Describe each of the economic functions of money

Describe each of the following economic functions of money and provide an example of each: (1) medium of exchange; (2) standard of value; and (3) store of value.

  In the system of approval voting

In the system of “approval voting”, a citizen may vote for as many candidates as she wishes. If there are two candidates, say A and B, for example, a citizen may vote for neither candidate, for A, for B, or for both A and B. As before, the candidate ..

  Dynamics between the government budget and the debt ceiling

Several organizations and individuals – usually advocates of a balanced budget – maintain National Debt Clock. Is national debt a worry for the economy? Economists do not agree on the answer to this question. How did the 1974 Congressional Budget Act..

  What is the ending-inventory as reported

Kevin Farley, an auditor with Koews CPAs, is performing a review of Knight Company’s Inventory account. Knight did not have a good year, and top management is under pressure to boost reported income. What is the ending-inventory as reported?

  Is there a positive and negative effect to the economy

In macroeconomics, international trades play a role in almost every item we purchase in our daily lives. For example, Colgate toothpastes are “Made in Mexico”, items that are “Made in China”, “Made in Malaysia”, etc. What are your views and opinions ..

  What is the equilibrium quantity and equilibrium price

What is the equilibrium quantity and equilibrium price for the following demand and supply curves:

  Welfare-other income redistribution programs and policies

Compare and contrast the Swedish and American approaches to welfare and other income redistribution programs and policies.

  Determine the inflation rate

Array Solutions requires a 14 percent return on their projects. Analysis shows that even though they have been earning the desired 14 percent, their real return appears to be only 10 percent when they look at what they can buy with their returns. Exp..

  Explain what popularity of this diet would do for demand

In the early part of the 21st century the high protein Atkins diet became quite popular in the US. Explain what the popularity of this diet would do for demand for a high protein food like meat and for the marginal utility of meat at former levels of..

  Calculate the gdp of autoland using the final goods approach

An automobile factory sold $10,000,000 in automobiles to final consumers. Given these events, calculate the GDP of Autoland using a. the final goods approach. b. the value-added approach.

  Two alternative ways of increasing output

John Wilson, the owner of a fast-food restaurant, estimated that he can sell 1,000 additional hamburgers per day by renting more automated equipment at a cost of $100 per day. Alternatively, he estimated that he could sell an extra 1,200 hamburgers p..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd