When the actual real interest rate is less than the equilibrium real interest rate
A) the equilibrium real interest rate will rise.
B) borrowers find it difficult to borrow.
C) there is a shortage of loanable funds.
D) Both answers B and C are correct.
D
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The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point B to point D?
A) 500 bottles of wine B) 2 bottles of wine C) 1/2 of a bottle of wine D) 1000 bottles of wine E) None of the above answers is correct.
A tax on a product causes a deadweight loss because: a. some consumer surplus is transferred from buyers to producers
b. some producer surplus is transferred from producers to consumers. c. some consumer and producer surplus is transferred to the government. d. it distorts the incentives of producers and consumers so that the efficient level of output is not produced.
The economy's self-correcting mechanism
a. prevents the economy from ever being in disequilibrium b. guides the economy to full employment in the long run c. maintains a steady long-run price level d. is a short-run adjustment process e. is controlled by the Fed
At his current level of output, a monopolist has an MR of $10, an MC of $6, and an economic profit of zero. If the market demand curve is downward sloping and his marginal cost curve upward sloping, the monopolist
a. is producing his profit-maximizing level of output. b. could increase his profit by increasing his output. c. could increase his profit by increasing his price. d. should exit the market if he has positive fixed cost.