Economic efficiency in a competitive market is achieved when
A) economic surplus is equal to consumer surplus.
B) consumers and producers are satisfied.
C) the marginal benefit equals the marginal cost from the last unit sold.
D) producer surplus equals the total amount firms receive from consumers minus the cost of production.
Answer: C
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Melissa has an income of $240 a month to spend on tennis lessons and concert tickets. The price of a tennis lesson is $20, and the price of a concert ticket is $40
If the quantity of tennis lessons is QT, and the quantity of concert tickets is QC, Melissa's budget line equation is A) QC = 6 - 0.5QT. B) QC = 12 - 2QT. C) QC = 240 - 40QT. D) QC = 20 + 40QT.
Graphically, the producer surplus for a given demand curve is the total area: a. below the marginal social cost curve and above the market price. b. above the supply curve and below the market price
c. below the demand curve and above the supply curve. d. below the private cost curve and above the market price.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and GDP Price Index rises. b. The quantity of real loanable funds per time period falls, and GDP Price Index falls. c. The quantity of real loanable funds per time period rises, and GDP Price Index falls. d. The quantity of real loanable funds per time period falls, and GDP Price Index remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
The price of coffee fell from $1.97 per pound in December 2014 to $1.62 in December 2016. During that time the overall price level increased by 1 percent. What was the change in relative price in coffee during this period?
a. –$0.31 b. –$0.33 c. –$0.35 d. –$0.37