An individual seller's producer surplus on a unit of a good is
a. zero in perfect competition
b. zero in monopoly
c. greater than the buyer's consumer surplus on that unit
d. an example of a side payment
e. the difference between the price the seller receives and the cost of producing that unit.
E
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Between 1980 and 2014, income inequality in the United States has increased in part due to rapid technological change. How does technological change contribute to income inequality?
A) Advancements in technology displace skilled and unskilled workers in certain fields, leading to higher unemployment rates. B) The opportunity cost of investing in technology is investments in human capital. The resulting decrease in labor's marginal productivity has led to lower wages. C) Technology complements the skills of the well-educated while rendering redundant the labor services of unskilled and low-skilled workers. This causes a decline in the wages of low and unskilled workers relative to other workers. D) Technological change favors the owners of capital and since high-income individuals tend to own capital, income inequality is further exacerbated.
According to the rational expectations hypothesis, monetary policy can have real effects on such variables as real Gross Domestic Product (GDP) in the short run
A) only when the policy is anticipated. B) only when the policy is unsystematic and unanticipated. C) regardless of whether the policy is anticipated or unanticipated. D) when the Federal Reserve's open market committee operates as expected in either buying or selling bonds.
The law of supply states that, holding other factors constant, as price increases
a. Quantity supplied increases b. Quantity supplied decreases c. Quantity demanded increases d. Quantity demanded decreases
If inflation is expected by both borrowers and lenders, then we would expect
a. real rates to be higher than nominal rates of interest. b. real rates to be equal to nominal rates of interest. c. real rates to be lower than nominal rates of interest. d. nominal rates of interest to be less than the expected inflation rate.