What is a surplus? What is a shortage?
What will be an ideal response?
A surplus is a situation in which the quantity supplied is greater than the quantity demanded. A shortage is a situation in which the quantity demanded is greater than the quantity supplied.
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Refer to Scenario 1-2. Using marginal analysis terminology, another economic term for the incremental cost of producing the last 300 hats is
A) marginal cost. B) explicit cost. C) operating cost. D) Any of the above terms are correct.
A market with many sellers, some influence over price, low barriers to entry, a differentiated product, and non-price competition often taking the form of advertising is known as
A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly.
Why might an expansion in government spending increase the severity of the coordination problem during a recession?
a. Increases in government spending will not affect the composition of aggregate demand. b. Congress is unlikely to approve increases in government spending during a recession. c. Spending increases will be driven by political considerations and will often flow into areas where resources are already fully employed. d. Government spending can be counted on to flow toward high productivity projects.
Holding liquidity and default risk constant, an investor earning 4% from a tax-exempt bond who is in a 20% tax bracket would be indifferent between that bond and a taxable bone with a(n):
A. 6% yield. B. 8.0% yield. C. 7.5% yield. D. 5% yield.