A market equilibrium is only efficient if:
A. all relevant costs and benefits are reflected in the market supply and demand curves.
B. output is distributed equitably among consumers.
C. consumer surplus and producer surplus are both zero.
D. the consumer surplus and the producer surplus associated with a given transaction are equal.
Answer: A
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The World Bank was created to help finance economic development in poor countries
a. True b. False Indicate whether the statement is true or false
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X, ceteris paribus.Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of combsOpportunity Cost(Foregone brushes)Number of brushesOpportunity Cost (Foregone combs)J4 0NAK3 10 L2 17 M1 21 N0NA23 On the basis of Table 1.3, in the production range of 1 to 2 combs the opportunity cost of producing 1 more comb in terms of brushes is
A. 4. B. 1/2. C. 1/7. D. 2/17.
All else equal, compared to small-budget items such as paper towels, the price elasticity of demand for big-ticket items such as refrigerators is ________:
A. equal B. very low C. lower D. higher