hw4 - BUAD 351 - Economic Analysis for Business Decisions...

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Homework 4 due: Thu 03/26/2009 PART (i): multiple choice please provide the answers in the following box: question answer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. In long-run equilibrium with free entry: a. the equilibrium price must equal the minimum average total cost. d. All of the above supply function is: a. Q = 2+3P b. 5Q = 2+3P c. Q = 10 + 15P 3. Aggregate surplus is equal to a. consumer surplus + producer surplus. b. consumers±total willingness to pay for a good minus the total avoidable cost of producing the good. d. all of the above 4. When aggregate surplus is maximized, deadweight loss is a. equal to sunk costs. b. zero. c. the area under the demand curve. d. none of the above 5. The Second Welfare Theorem states that a. government welfare and programs are essential to achieve a reasonable balance between e¢ ciency and equity. b. every Pareto e¢ cient allocation can be achieved as a competitive equilibrium, given some initial allocation of resources. c. competitive market forces cannot achieve a Pareto e¢ cient allocation. d. All of the above
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This note was uploaded on 04/14/2009 for the course BUAD 351 taught by Professor Eastin during the Spring '07 term at USC.

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hw4 - BUAD 351 - Economic Analysis for Business Decisions...

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