The total amount of consumer surplus and producer surplus is at its maximum when
A) consumers and producers are allowed to trade at the market clearing price.
B) the government imposes a price floor that is higher than the market clearing price.
C) the government imposes a price ceiling that is lower than the market clearing price.
D) free market exchanges do not exist.
Answer: A
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The terms of trade refers to
A) the ratio at which a country can trade its exports for imports from other countries. B) the role of the government in overseeing international trade. C) the rules and regulations that countries must adhere to when trading. D) a legal document that specifies the trade quantities agreed to by two countries.
The short run is
A) a period of time during which at least one input cannot be changed. B) a period of time during which no inputs can be changed. C) a period of time during which all inputs can be changed. D) a period of time shorter than one year.
A firm that is a monopsonist in the labor market and a monopolist in the product market will hire labor to the point at which
A) MFC = MRPm. B) a perfectly elastic labor supply = MRP. C) a perfectly inelastic labor supply = perfectly inelastic labor demand. D) where supply of labor = demand for labor.
Policies designed to affect the quantity of money are
A. supply side or growth policies. B. government spending policies. C. fiscal policies. D. monetary policies.