In the market for a pair of shoes, Jena is willing to pay $75 for a pair while Jane is willing to pay $85 for a pair. The actual price that each must pay for a pair of shoes is $65. What is the combined amount of consumer surplus of Jena and Jane?
A. $10
B. $20
C. $30
D. $160
Answer: C
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Refer to Table 15-3. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy
If the Fed wants to keep real GDP at its potential level in 2017, it should A) buy Treasury securities. B) decrease income taxes. C) sell Treasury securities. D) decrease the required reserve ratio.
When a firm increased its output by one unit, its AC decreased. This implies that
A) MC < AC. B) MC = AC. C) MC < AFC. D) the law of diminishing returns has not yet taken effect.
What is a good historical example of when the Fed created a recession to reduce inflation expectations?
a. In the early 1980s b. In the early 1960s c. During the Great Depression d. In the late 1920s e. During World War II
Under what circumstances would you expect economic profits to be zero in a particular industry?
A. During a recession B. When there is little competition in the industry C. When the industry is neither expanding nor contracting D. When the demand for the product being produced is increasing