In the figure above, suppose the market is at equilibrium. Then area A is the
A) marginal benefit.
B) marginal cost.
C) amount of the consumer surplus.
D) amount of the producer surplus.
E) deadweight loss.
C
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If the economy is growing 3% a year and the government increases the ratio of interest on the national debt to GDP, we may conclude that
A) the output ratio will fall. B) additional interest payments exceed 3% of GDP. C) tax revenues will fall. D) the Laffer curve will be inoperable.
When the price of a product rises, the increase in quantity supplied will generally be greater in the long run than the short run because
a. producers maximize short-run, not long-run, profits. b. over time, new firms will enter the industry and old firms will expand their operations in response to the price increase. c. consumers are less resistant to higher prices in the long run than in the short run because they have fewer options in the long run. d. consumer income will expand in the long run, causing resource prices to rise, which will induce producers to increase output.
Adam Smith believed that if people were free to pursue their own interests.
What will be an ideal response?
Which of the following countries has the most equal income distribution?
A. Sweden B. Japan C. United States D. The Netherlands