Which of the following best describes how recessions are illustrated in the AD/AS diagram?
a. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially above potential GDP, while in years of resurgent economic growth the equilibrium will typically be close to potential GDP.
b. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially below potential GDP, while in years of resurgent economic growth the equilibrium will typically be above potential GDP.
c. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially below potential GDP, while in years of resurgent economic growth the equilibrium will typically be close to potential GDP.
d. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially above potential GDP, while in years of resurgent economic growth the equilibrium will typically be below potential GDP.
c. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially below potential GDP, while in years of resurgent economic growth the equilibrium will typically be close to potential GDP.
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Competition forces firms to produce and sell products as long as the ________ to consumers exceeds the ________ of production
A) marginal benefit; marginal cost B) marginal cost; marginal benefit C) marginal benefit; marginal benefit D) marginal cost; marginal cost
Which of the following is a final good or service?
A. Coffee grounds you use to make your coffee every morning B. Coffee grounds used by a coffee shop to make your coffee every morning C. Coffee grounds used by Edy's to make coffee ice cream D. None of these is a final good or service.
Assume the demand curve is line AD. If price is CB, then in the graph above, consumer surplus is bounded by
A. CAD.
B. CBED.
C. BAE.
D. None of these choices are true.
If the government regulates the price a monopoly can charge, and the price ceiling is set below what the competitive market price would be, then
A) a shortage will exist. B) a surplus will exist. C) producer surplus is maximized. D) consumer surplus is maximized.