ECON 1100 Exam 2 | Questions with 100% Correct Answers | Verified | Latest Update 2024

Brett has agreed to sell a rare comic book to a collector who offered to pay $125. Brett's producer surplus is - $50 if the minimum price he would have accepted is actually $75 Government policies that interfere with the market mechanism and cause price to be different from equilibrium are - inefficient because they reduce total surplus The difference between the maximum price consumers are willing to pay and the actual price consumers pay in the market measure - consumer surplus A demand curve can be best be interpreted as a - marginal benefit curve If haircuts are normal goods, then a decrease in consumer income leads to a(n)________ equilibrium price of haircuts, and producer surplus to barbers will _________ - decrease;decrease The law of diminishing marginal returns suggests that marginal cost - increases as output increases The purpose of setting a price floor above the equilibrium price is to - maintain a high price for the sellers in the market