Jim is haggling with a car dealer on the price of a used car. During the bargaining, the storekeeper discovers that the car's stereo is better than he or Jim originally realized. If Jim is a huge music fan, the total surplus available from the sale
a. Increases
b. Decreases
c. Is not affected
d. All of the above
a
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With rational expectations, a policy that would decrease AD would certainly lead to: a. higher inflation and lower unemployment in the short run
b. lower inflation and higher unemployment in the short run. c. higher inflation and no change in unemployment in the short run, if people's expectations were correct. d. none of the above.
A flexible or floating exchange rate system is one in which the:
a. government closely monitors and controls the value due to the impact on trade flows. b. government makes no attempt to fix it against any base currency. c. government actively tries to achieve fluctuations in the rate. d. government fixes the rate against the currency of its largest trading partner.
The sum of consumer surplus and producer surplus is equal to
A) the deadweight loss. B) the economic surplus. C) zero. D) total profit.
Refer to the information provided in Figure 7.9 below to answer the question(s) that follow. 
Figure 7.9Refer to Figure 7.9. The firm's isocost line would shift from CE to CD if
A. the price of capital rises. B. the price of labor rises. C. the firm's total expenditure on inputs decreased. D. either the price of labor fell or the firm's total expenditure on inputs decreased.