When real GDP falls for two consecutive quarters the economy is in a
A) peak. B) trough. C) recession. D) depression.
C
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The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. What is the deadweight loss from this tax?
A) $1,500 B) $3,000 C) $4,500 D) $6,000
Suppose the supply of coal is perfectly inelastic, and the price elasticity of demand for coal is -0.4
If the government imposes a binding price ceiling for coal at a price that is 20 percent below the market equilibrium price, what is the impact of this policy on the market quantity? A) Excess demand equals 80 percent of the market equilibrium quantity B) Excess demand equals 8 percent of the market equilibrium quantity C) Excess demand equals 16 percent of the market equilibrium quantity D) The policy does not affect the market quantity
If the demand curve for agricultural products is inelastic and farmers as a group become more productive, then prices of agricultural goods will __________ and total revenue earned by farmers will __________
A) decrease; increase B) decrease; decrease C) increase; increase D) increase; decrease E) We cannot answer this question without knowing how inelastic the demand curve is.
Suppose there is a simultaneous increase in demand and increase in supply. Given this information, we know with certainty that
A. the equilibrium price will increase. B. the equilibrium quantity will increase. C. the equilibrium price will increase, and the equilibrium quantity will increase. D. both the equilibrium price and the equilibrium quantity will increase.