Figure 3-16
Refer to . When the price falls from P2 to P1, producer surplus
a.
decreases by an amount equal to C.
b.
decreases by an amount equal to A + B.
c.
decreases by an amount equal to A + C.
d.
increases by an amount equal to A + B.
b
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Differentiate between a closed economy and an open economy
What will be an ideal response?
Activists believe that
a. discretionary changes in macroeconomic policy can help smooth the ups and downs of the business cycle. b. balancing the federal budget is of primary importance to economic stability. c. the economy's self-correcting mechanism, if not stifled by perverse policies, will prevent prolonged periods of high unemployment. d. the M1 money supply should be increased at a steady annual rate.
Which of the following is most likely to reduce the nominal market wage in a job category?
a. The job is widely viewed as dangerous. b. The job is prestigious, and the work is quite interesting. c. The job requires employees to work the night shift from 11 p.m. to 7 a.m. d. The job requires employees to move from city to city quite often.
Based on the given figure, the economy is initially in long-run equilibrium at point A. If there is a favorable supply shock that increases potential output and shifts the long-run aggregate supply curve from LRAS to LRAS', then the new long-run equilibrium is reached at point:
A. E. B. C. C. B. D. D.