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.