Refer to Figure 6.4. Suppose that the current price is set at B and Q2 units of a good are traded. Which of the following statements is incorrect?
A. The quantity demanded is equal to the quantity supplied.
B. Total surplus is not maximized.
C. A buyer's willingness to pay equals a seller's willingness to accept.
D. The trade of a good at the current price is efficient.
Answer: B
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The ________ in a country's GDP during a recession is smaller if wages are ________
A) fall; rigid B) increase; rigid C) fall; flexible D) increase; flexible
When a person has a comparative advantage in producing a good or service, the person has
A) a higher opportunity cost in producing that product than someone else. B) a constant opportunity cost in producing that product. C) a decreasing opportunity cost in producing that product. D) a lower opportunity cost in producing that product than someone else. E) an increasing marginal benefit in producing the good.
Refer to Figure 26-12. In the dynamic AD-AS model, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in
A) real GDP levels higher than what would occur if no policy had been pursued. B) inflation rates higher than what would occur if no policy had been pursued. C) potential real GDP levels lower than what would occur if no policy had been pursued. D) unemployment rates higher than what would occur if no policy had been pursued.
Ramon is able to buy gas at the price ceiling rate. In which section of this graph would his purchase be located?
a. between 0 and QS
b. between QS and Q2
c. between Q2 and QD
d. between QS and QD