1. Which of the following is true for a market with no externalities under perfect competition?
Market equilibrium gives the highest possible total surplus.
Market equilibrium gives the highest possible unit price.
Market equilibrium gives the highest possible total revenue.
Market equilibrium gives the highest possible producer surplus.
Market equilibrium gives the highest possible consumer surplus.
2. A market has a demand curve described by P=60-3Q and a supply curve described by P=20+2Q. Calculate Consumer Surplus.
3. A market has a demand curve described by P=30-Q, a supply curve described by P=16+Q, and a price ceiling of 20. Calculate the Total Surplus of the market with the price ceiling.