Maximizing social benefit is maximizing consumer surplus
Indicate whether the statement is true or false
F Consumer surplus plus producer surplus is a better representation of welfare. Producer surplus is welfare also, and it should be remembered that many who receive producer surplus are retirees and other shareholders who depend on income from the shares. This is a hard question because some argue that only consumer surplus should be considered as welfare but that overlooks the positive value of producer surplus..
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When the economy was at full employment in the late 1990s, the price level was continually rising. This meant
a. the Fed was pursuing a passive monetary policy. b. the Fed was pursuing an active monetary policy. c. hawk and dove policies canceled each other out. d. the economy's self-correcting mechanism was not operating. e. none of the above.
In a market system, prices are used to coordinate economic activity
a. True b. False Indicate whether the statement is true or false
Which of the following will most likely cause an increase in the long-run aggregate supply curve?
a. a reduction in the general level of prices b. an increase in the general level of prices c. an improvement in technology that substantially reduces the cost of generating energy d. an increase in taxes that makes it more expensive for Americans to import crude oil
Using purchasing power parity instead of exchange rates to calculate output will most likely:
A. lower the relative value of output in developing countries. B. show that prices in developing countries are higher than prices in developed countries. C. leave the relative value of output in developing countries unchanged. D. increase the relative value of output in developing countries.