At the competitive market outcome in the above figure, the
A) producer surplus is equal to $480 million.
B) total producer surplus from turkey sales is zero.
C) sum of consumer and producer surpluses from turkey is $640 million.
D) All of the above answers are correct.
C
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Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very little business. Aiyanna now decides to lower pizza prices by 5 percent per week for an indefinite period of time. We can expect that each successive week:
A. demand will become more price elastic. B. price elasticity of demand will not change as price is lowered. C. demand will become less price elastic. D. the elasticity of supply will increase.
If the government spending multiplier is 7, the tax multiplier must be
A) -6. B) -3. C) 3. D) 7.