Brock is willing to pay $400 for a new suit, but he is able to buy the suit for $250 . His consumer surplus is
a. $650.
b. $150.
c. $250.
d. $400.
b
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How does an increase in the price level affect the position of the C + I + G + X curve and in turn the equilibrium level of real GDP?
A) The C + I + G + X curve shifts down, thereby reducing the equilibrium level of real GDP. B) The C + I + G + X curve shifts down, thereby increasing the equilibrium level of real GDP. C) The C + I + G + X curve shifts up, thereby reducing the equilibrium level of real GDP. D) The C + I + G + X curve shifts up, thereby increasing the equilibrium level of real GDP.
The economy is in the horizontal portion of the AS curve, investment spending is interest insensitive and there is no liquidity trap. According to the Keynesian transmission mechanism, if the money supply increases the interest rate will __________, investment spending will __________, the AD curve will __________, and Real GDP will __________
A) fall; fall; left; fall B) rise; drop; left; fall C) fall; remain unchanged; not shift; not change D) rise; remain unchanged; not shift; not change E) none of the above
An example of an investment is
A. the purchase of a share of Berkshire Hathaway stock. B. the purchase of an iPhone by a company for one of its salesmen. C. the purchase of a government Treasury bill. D. all of the above
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price for that good.
As shown in the graph, when a government imposes a quota, consumer surplus will:
A. increase by EFGH. B. increase to ABCD. C. decrease by EFGH. D. decrease by FG only.