Producer surplus is measured as the area
A. below the demand curve and above the market price.
B. below the supply curve and above the market price.
C. above the supply curve and below the market price.
D. above the demand curve and below the market price.
Answer: C
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Unemployment insurance is an example of a discretionary fiscal policy
a. True b. False Indicate whether the statement is true or false
The result of the balanced budget multiplier is that aggregate demand changes by the amount of the change in:
a. government spending. b. tax revenue. c. government spending plus tax revenue. d. government spending minus tax revenue.
Which of the following most clearly distinguishes between positive and normative economics?
a. Positive economics is the study of what ought to be; normative economics is concerned with the facts. b. Positive economics is the study of the facts; normative economics is concerned with what ought to be. c. Positive economics is the study of supply and demand in narrowly defined markets such as the market for shoes; normative economics focuses on highly aggregated markets such as the market for all consumer products. d. Positive economics is the study of goods that are scarce; normative economics is concerned with goods that are not scarce.
The effects of the national health care program on goods and services markets will
A) increase the marginal cost of the firm. B) increase the quantity produced of the firm. C) consumers will pay lower prices for many goods and services. D) decrease the quantity demanded for all goods and services.