The best economic theory is the one
a. whose assumptions most closely match reality
b. that yields the most accurate predictions
c. that most simply represents reality
d. that most closely matches the conscious behavior of economic decision makers
e. that includes the most details
B
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The benefits to a program are more difficult to quantify in dollar terms that the costs to a program
a. True b. False
If Bill is willing to pay $10 for one good X, $8 for a second, and $6 for a third, and the market price is $5, then Max's consumer surplus is:
a. $24 b. $18. c. $9 d. $6.
Table 36-2 ? Domestic ? ? ? GDP Expenditure ? Exports Imports Total Expenditures (Y) C+ I + G (X) (IM) C+ I + G + (X?IM) $2,500 $3,100 $650 $250 _____ 3,000 3,400 650 300 _____ 3,500 3,700 650 350 _____ 4,000 4,000 650 400 _____ 4,500 4,300 650 450 _____ 5,000 4,600 650 500 _____ 5,500 4,900 650 550 _____ In Table 36-2, what is equilibrium GDP?
A. $2,500 B. $3,500 C. $4,500 D. $5,500
Why does producer surplus decrease as price decreases?
A. Producers sell less of the good while consumers buy even more of the good. B. Consumers buy more of the good at the lower price. C. Producers sell less of the good and receive less from the lower price. D. Producers sell more of the good but receive less from the lower price.