At the end points on a budget line, the consumer is not spending all of his budget, since one of the goods is not being purchased.
Answer the following statement true (T) or false (F)
False
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Which of the following statements would Milton Friedman disagree with?
A) Monetary policy has few short-run effects on the real economy. B) In the long run, changes in the money supply primarily affect the price level. C) In practice, there is little scope for using monetary policy actively to smooth out business cycles. D) The Federal Reserve cannot be relied on to effectively smooth out business cycles.
The above figure shows the market for steel ingots. If the market is competitive, then
A) the socially optimal quantity of steel is zero. B) the socially optimal quantity of steel of 50 units is produced. C) the socially optimal quantity of steel of 100 units is produced. D) more than the socially optimal quantity of 50 units of steel is produced.
Economists should consider? ________ when evaluating options.
A) only explicit costs and benefits
B) only implicit costs and benefits
C) both explicit and implicit costs and benefits
D) neither explicit nor implicit costs and benefits
If a constant-cost, perfectly competitive industry experiences an increase in the demand for its product, we would expect
A) only the market price of the good to increase. B) both the market price and quantity supplied to increase. C) decreases in the market price, but increases in quantity supplied. D) only the quantity supplied of the product to increase.