Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
Prior-to-trade (autarky) producer surplus equals areas
A. B + C.
B. J + H.
C. B + C + D.
D. B + C + D + E + F.
Answer: C
You might also like to view...
Answer the following statement(s) true (T) or false (F)
1. Cost-effectiveness requires that resources are allocated such that the additional benefits to society are equal to the additional costs. 2. Assume that the marginal revenue associated with the 12th unit of output is $25 and the marginal cost is $14. As a result, the firm should produce more, because the marginal profit at that output level is greater than zero. 3. When a profit-maximizing firm increases output to Q = 50, its MR= $100 and MC = $124, meaning that total profitfalls by $24, so the firm should contract production. 4. In perfect competition, the firm faces a perfectly inelastic demand. 5. The demand faced by the perfectly competitive firm is perfectly elastic, meaning that price and marginal revenue are equal.
The ________, the ________ is the quantity of real GDP supplied and the ________ is the quantity of real GDP demanded
A) lower the price level; greater; smaller B) lower aggregate demand; greater; smaller C) higher the price level; greater; smaller D) lower the supply of labor; greater; smaller E) greater the demand for labor; smaller; greater
How would the real exchange rate need to change to get aggregate expenditure to increase?
A. Increase B. Decrease C. Remain constant D. Exchanges rates don’t generally affect aggregate expenditure.
Market clearing in the loanable funds market
a. violates Say's Law b. guarantees that total spending will be just sufficient to purchase whatever output is produced c. means that the interest rate never changes d. guarantees that total spending will equal the quantity of loanable funds demanded e. requires that the government run a budget deficit