Suppose you are trying to understand the effect that an increase in the price of grapes will have on the market for wine. An effective model to determine this effect is one that evaluates the change in the price of grapes on the market quantity of wine assuming:
a) buyers' incomes also change.
b) buyers' preferences and incomes also change.
c) some wines use different grapes.
d) no other change takes place.
d) no other change takes place.
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In the figure above, when the market is in equilibrium, marginal benefit ________ marginal cost, so the quantity of pizza produced is ________
A) equals; efficient B) exceeds; efficient C) is below; efficient D) is below; not efficient E) exceeds; not efficient
There is no completely satisfactory way to define the money supply in the United States because
A) data on the money supply are always approximate and only available after a time lag of several months. B) much of it is held by the public and so cannot be monitored by the Fed. C) the Federal Reserve uses a number of different definitions. D) the liquidity of any asset is a matter of degree.
In the long run, a perfectly competitive firm leaves the market if the market price is less than the firm's average total cost
Indicate whether the statement is true or false
The balance of payments is in equilibrium when
A) the sum of the current account balance and capital account balance is zero. B) net exports are zero. C) net foreign investment is zero. D) real foreign investment is equal to net exports.