An Article in the Wall Street Journal in Early 2001

question 236

Multiple Choice

An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery.The first development concerned side effects from the surgery, including blurred vision.The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges.In the market for laser eye surgeries, these two developments

• A)decreased demand and decreased supply, resulting in a decrease in the equilibrium quantity and an increase in the equilibrium price of laser eye surgeries.
• B)decreased demand and increased supply resulting in an increase in both the equilibrium quantity and the equilibrium price of laser eye surgeries.
• C)decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries.
• D)decreased demand and increased supply, resulting in a decrease in both the equilibrium price and the equilibrium quantity of laser eye surgeries.

Comprehend how total and marginal utility impact consumption decisions.

Identify the economist Alfred Marshall's contribution to the concept of consumer surplus.

Analyze the relationship between consumption quantity and consumer surplus.

Understand how marginal utility affects decisions in utility maximization.

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Definitions:

Organization

An entity, such as a company, institution, or association, comprised of people and resources working towards common goals or objectives.

Encourage

To inspire with courage, spirit, or confidence; to stimulate by assistance or approval.

Indirect Approach

A communication strategy that involves conveying a message in a roundabout way rather than directly.

Routine Request

A standard or regular way of asking for something within a business or professional context.