Assuming the market is in equilibrium in the graph shown with demand D and supply S2 at a quantity of 8, consumer surplus is:
A. $7.
B. $32.
C. $11.
D. equal to the producer surplus.
Answer: D
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The sum of personal consumption expenditure, investment expenditure, government expenditure, and net export expenditure on the total amount of real output in the economy in a given period of time is called:
A) potential GDP. B) aggregate expenditure. C) real money balances. D) none of the above.
Many theaters sell empty seats at a deep discount just before show time. What economic concept is displayed by this behavior?
A. Consumer demand B. Sunk costs C. Price optimization D. Thinking at the margin
Ally owns a shoe store. The market wage is $10 per hour, and the cost of capital is $2 per week for every $1000, of capital borrowed. Consider the isocost line associated with spending $8000, per week, and let the y-axis be the amount of capital borrowed in increments of $1000. Which of the following is not true?
A. If Ally employs 600 hours of work, she can borrow $1 million of capital. B. If Ally employs 400 hours of work, she can borrow $3 million of capital. C. The slope of the isocost line is ?5. D. If Ally borrows no capital, she can employ 800 hours of work. E. If Ally employs no workers, she can borrow $4 million of capital.
Public choice economists use models that focus on economic incentives as applied to politicians.
Answer the following statement true (T) or false (F)