1. All else equal, what happens to consumer surplus if the price of a good decreases?
a. Consumer surplus increases.
b. Consumer surplus decreases.
c. Consumer surplus is unchanged.
d. Consumer surplus may increase, decrease, or remain unchanged.

2. Refer to the above figure. If the total surplus is $240, the consumer surplus is:
a. $100, then the price of the good is $130.
b. $130, then the price of the good is $120.
c. $160, then the price of the good is $100.
d. $120, then the price of the good is $90.

3. A tariff is a:
a. limit on how much of a good can be exported.
b. limit on how much of a good can be imported.
c. tax on an exported good.
d. tax on an imported good.

Question

1. All else equal, what happens to consumer surplus if the price of a good decreases?
a. Consumer surplus increases.
b. Consumer surplus decreases.
c. Consumer surplus is unchanged.
d. Consumer surplus may increase, decrease, or remain unchanged.
 

2. Refer to the above figure. If the total surplus is $240, the consumer surplus is:
a. $100, then the price of the good is $130.
b. $130, then the price of the good is $120.
c. $160, then the price of the good is $100.
d. $120, then the price of the good is $90.
 
3. A tariff is a:
a. limit on how much of a good can be exported.
b. limit on how much of a good can be imported.
c. tax on an exported good.
d. tax on an imported good.

	A monopoly sometimes makes a positive profit in the long run.
	A price ceiling on a monopoly is always desirable.
	Price does not equal marginal cost unless price is regulated.
	None of the above statements are true. The demand curve for product X is given by Q_X^d = 520 - 5P_X. a. Find the inverse demand curve. P_X = - Q_X^d b. How much consumer surplus do consumers receive when P_x = $45? $ c. How much consumer surplus do consumers receive when P_x = $35? $ d. In general, what happens to the level of consumer surplus as the price of a good falls?

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