Suppose that demand is represented by the equation Q = 16000 - 2000P and supply is represented by Q = 4000P - 8000. Therefore, equilibrium price is...
Question

# 1.Suppose that demandsupplyequilibrium price A.\$4B.\$1C.\$2D.\$82.Assume that the

is represented by the equation Q = 16000 - 2000P and  is represented by Q = 4000P - 8000. Therefore, is

total cost increase from \$80 million to \$89 million when the government widens the 3-lane highways to 6-lane highways but the total benefits increase from \$50 million to \$62 million. This public project is considered

A. Justifiable because the total cost \$29 million is less than the total benefits (\$72 million)

B. Optimal because the Marginal Cost {MC} = Marginal Benefit {MB}

C. Beneficial because MB (\$12 million) is greater than MC (\$9 million)

D. Not justifiable because MB (\$72 million) exceeds MC (\$29 million)

3.The Law of Supply describes direct relationship between the price and the quantity supplied, other things remaining the same.

A.True

B.False

4.Consumers express self-interest when they:

B.Expect high salary

C.Seek the lowest price for the product but maximum utility

D.Collect economic profits

5.Laurie says that "The minimum wage rate in Ontario is \$14 per hour. The employers are required by law to pay at least \$14 per hour to the employees." Kimble argues that "The minimum wage rate should be increased further because of an increase in the cost of living" We can conclude that:

A.Both statements belong to the normative economics

B.Laurie's statement is related to the positive economics but Kimble's statement belongs to the normative economics

C.Laurie's statement is related to the normative economics but Kimble's statement belongs to the positive economics

D.Both statements are related to the positive economiocs

6.Robertson is a shopkeeper in a Flea market. He was willing to accept the minimum selling price \$60 for a DVD player. However, one customer purchased it for \$65In this scenario

A.Consumer surplus is \$5

B.Consumer surplus is \$60

C.Producer surplus is \$65

D.Producer surplus is \$5

7.Cost function of Raymond Company is given as cost = \$1500 + 15% of sales revenue. Raymond Company sold 1600 units at the price of \$4 per unitThe cost of Raymond

A.\$2460

B.\$3100

C.\$6400

D.\$1500

8.Once a public service or product is provided, everyone can obtain the benefits even if everyone does not pay for it and there is no effective way to check it. This type of scenario is known as

A.Asymmetric information

B.Free Rider problem

C.Over allocation

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