Micro Economics Ch. 7

A market where sellers orally state asks and buyers orally state offers is known as​ a:

double oral auction.

In a perfectly competitive​ market, a firm with multiple production plants will minimize total costs of production when

each plant produces where marginal revenue equals marginal cost.

In a perfectly competitive​ market, when firms enter and exit competitive​ markets:

it is a good sign the market is working.

During peak​ demand, service-based companies using a​ surge-pricing model often charge more than during less busy times in order to

move the market to equilibrium.

An outcome is Pareto efficient if

no individual can be made better off without making someone else worse off.

A​ non-market price imposition is a

price control

All of the following are issues faced by central planners in a command​ economy, except:

setting quantity targets of production.

Social surplus is the​ ____________.

total value from trade in a market

Social surplus is maximized when the​ ___________.

​A. highest-value buyers are making a purchase and the​ lowest-cost sellers are selling. B. buyers and sellers as distinct groups are doing as well as they possibly can. C. competitive market is in equilibrium. D. all of the above.

A deadweight loss is the _________ in social surplus that results from a market _________.

Decrease, Distortion

When economists speak of a deadweight​ loss, they are referring to _______ in ________ caused by a market distortion.

Decrease, Social Surplus

In a ________ economy, a central authority determines the goods and services produced while a ________ economy is based on price signals and strong economic incentives.

Command, Market

A change in consumer tastes away from corn dogs toward hot dogs

This will decrease corn prices by shifting the demand curve for corn leftward

A fallfall in the price of wheat​ (a substitute for​ corn).

This will decrease corn prices by shifting the demand curve for corn leftward

An increase in the number of demanders in the corn market.

This will increase corn prices by shifting the demand curve for corn rightward

A flood that destroys a great deal of the corn crop.

This will increase corn prices by shifting the supply curve for corn leftward

Which of the following would maximize social​ surplus?

Trade at the competitive market equilibrium.

Bilateral negotiations often lead to prices​ that:

approach the theoretical equilibrium price.