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the consumer and producer surplus

the consumer and producer surplus

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Consider a market where the demand is given by 𝑄𝐷=80−45𝑃and supply is given by 𝑄𝑆=15𝑃. What are the consumer and producer surplus?a)Consumer surplus is 240 and producer surplus is 450.b)Consumer surplus is 160 and producer surplus is 640.c)Consumer surplus is 800 and producer surplus is 1280.d)Consumer surplus is 1600 and producer surplus is 980.2.Assume that festival tickets and all-inclusive holidays are substitutes. Which of the following statements IScorrect?a)If the price of festival tickets goes down the quantity of all-inclusive holidays demanded will decrease.b)If the price of festival tickets goes down the quantity of all-inclusive holidays demanded will not change.c)If the price of festival tickets goes up the quantity of all-inclusive holidays demanded will decrease.d)If the price of festival tickets goes up the quantity of all-inclusive holidays demanded will not change..3.Which of the following statements IS NOT correct?a)A tax does not always lead to the inefficient output.b)Monopolies do not always create a deadweight loss.c)If two firms compete in prices (Bertrand competition) they will set a higher price than if they compete in quantities(Cournot competition).d)A monopolist chooses the price based on the elasticity of demand with respect to price (PED).

A winery is located next to a farm. The grapes are cultivated out in the open and benefit from the fertilizer used for the crops cultivated by the farm. The profit function for the winery is 𝜋𝑊=6𝑊−𝑊2+4𝐹where W is the bottles of wine the winery produces and F is the animals the farm has. The profit function for the farm is 𝜋𝐹=12𝐹−𝐹2. The two firms merge to internalise the externality. What are the outputs they end up producing as one merged firm?a)W=3 and M=6.b)W=6 and M=8.c)W=6 and M=6.d)W=3 and M=8.5.Choose the correct statement. The labour supply curve IS:a)Always downward sloping.b)Always upward sloping.c)Upward sloping for monopsonies.d)Perfectly elastic.6.Choose the correct statement. Potential output IS:a)The output demanded by households as consumption and by firms as investment.b)The output obtained when there is no unemployment.c)The output obtained by trading with other countries.d)The output obtained when all inputs are fully employed.7.The Fisher equation tells us that:a)Nominal interest rates are less volatile than the real ones.b)Real interest rates are always higher than nominal ones.c)Nominal interest rates can be the same as the real ones.d)Inflation is always positive.

 

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