Refer to Table 4-1. The table above lists the highest prices three consumers, Tom, Dick, and Harriet, are willing to pay for a short-sleeved polo shirt. If the price of one of the shirts is $28 dollars
A) Tom will receive $12 of consumer surplus from buying one shirt.
B) Harriet will receive $25 of consumer surplus since she will buy no shirts.
C) Tom will buy two shirts, Dick will buy one shirt and Harriet will buy no shirts.
D) Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each. Harriet will buy no shirts.
A
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The average total cost curves for plants A, B, C, and D are shown in the above figure. The plant size that is the most economically efficient
A) is plant A. B) is plant B. C) is plant C. D) depends on the desired level of output.
If both a monopoly and a competitive market with the same marginal cost would produce a quantity that is greater than the social optimum in a market because of externalities, then
A) welfare is greater under monopoly. B) welfare is greater under competition. C) welfare is the same for both market structures. D) the social optimum must be zero.