Which set of events would most likely increase aggregate demand?
A. An increase in incomes in foreign nations and a depreciation of the dollar.
B. A decrease in incomes in foreign nations and an appreciation of the dollar.
C. A decrease in incomes in foreign nations and a depreciation of the dollar.
D. An increase in incomes in foreign nations and an appreciation of the dollar.
Answer: A
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Suppose your own demand curve for tomatoes slopes downward. Suppose also that, for the last tomato you bought this week, you paid a price exactly equal to your willingness to pay. Then
a. you should buy more tomatoes before the end of the week. b. you already have bought too many tomatoes this week. c. your consumer surplus on the last tomato you bought is zero. d. your consumer surplus on all of the tomatoes you have bought this week is zero.
The liquidity approach to measuring money stresses the role of money as a
A) temporary store of value. B) medium of exchange. C) unit of accounting. D) standard of deferred payment.
A perfectly competitive firm definitely makes an economic profit in the short run if price is
A) equal to marginal cost. B) equal to average total cost. C) greater than average total cost. D) greater than marginal cost. E) greater than average variable cost.
Where pollution is prevalent, we might expect that
a. externalities are being effectively internalized b. marginal social costs are greater than marginal private costs c. marginal costs are greater than marginal benefits d. marginal private costs are greater than marginal social costs e. externalities are not important