Refer to Figure 6.3. On this graph, area ABC is:
A. consumer surplus.
B. producer surplus.
C. total surplus.
D. total producer net benefit.
Answer: A
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If, in the coordination failure model, the nominal money supply acts as a sunspot variable, then it is likely that the nominal money supply would
A) be procyclical. B) be acyclical. C) be countercyclical. D) alternatively appear to be procyclical and countercyclical.
The significantly high rates of inflation in the 1970s occurred, in part,
a. because of increased petroleum prices. b. due to high unemployment. c. despite falling gasoline prices. d. due to restrictive monetary policies.
Which of the following is correct?
A. If demand is elastic, an increase in price will increase total revenue. B. If demand is elastic, a decrease in price will decrease total revenue. C. If demand is elastic, a decrease in price will increase total revenue. D. If demand is inelastic, an increase in price will decrease total revenue.
If a U.S. firm produces cars in Mexico, that production should count towards
A) Mexico's GNP. B) U.S. GDP. C) U.S. GNP. D) It will not affect either U.S. GNP or U.S. GDP.