The gains from consumer surplus and producer surplus occur when
A) both consumers and producers engage in voluntary exchange.
B) consumers are willing to buy a good but producers are not willing to provide it.
C) producers are willing to provide a good but consumers are not willing to pay for it.
D) the government supplies the good instead of firms.
A
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The following table provides data for an economy in a certain year. Consumption expenditures1,000Imports600Government purchases of goods and services700Construction of new homes and apartments500Sales of existing homes and apartments600Exports500Government payments to retirees200Household purchases of durable goods300Begining-of-year inventory500End-of-year inventory600Business fixed investment300Given the data in the table, how much did households spend on nondurables and services?
A. 300 B. 700 C. 1,300 D. 1,000
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
As opportunity cost of holding money increases, people can
A) do nothing. B) increase the demand for money but not the quantity of money they hold. C) find a better job. D) try to maximize marginal benefit. E) seek substitutes for money.
Suppose country X can produce a personal computer at an opportunity cost of 1000 t-shirts. Assume that country X has a comparative advantage in the production of t-shirts
Would country X ever agree to terms of trade with country Y such that one personal computer would be exchanged for 1100 t-shirts?