If Cliff Althoff attends an antique auction, spots a vase that he would be willing to buy at $400, and he is the winning bidder at a price of $400, then Cliff
a. receives $400 in value from this vase
b. receives a consumer surplus of $400
c. should not have purchased the vase because consumer surplus is zero
d. receives zero value from this vase because consumer surplus is zero
e. ended up paying a consumer surplus of $400
A
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Assume that there is a shortage of lobster and that for whatever reason prices have not risen to choke off the excess demand
Instead, the government has exhorted people to voluntary refrain from lobster consumption to "maintain a balance between supply and demand." Assume that the temporary public service announcements are "effective" and the public reduces its consumption of lobster. Explain using supply and demand analysis what should happen to the equilibrium quantity of lobster and its equilibrium price. Why would this plan not have much of an impact on the lobster market in the long run?
If a public service commission requires a natural monopoly to set its price equal to the long-run marginal cost, this will result in
A) excessive economic profits to the monopoly. B) normal economic profits to the monopoly. C) losses to the monopoly. D) either economic profits or losses, depending on the efficiency of the monopoly.