Refer to the above figure. The highest price that consumers would be willing to pay for quantity Q2 is
A. P0.
B. P2.
C. P1.
D. cannot be determined from the diagram.
Answer: C
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The aggregate production function used in the Solow model expresses GDP as a function of:
A) level of technology and total efficiency units of labor only. B) physical capital and level of technology. C) physical capital and total efficiency units of labor only. D) physical capital, level of technology, and total efficiency units of labor.
What does the U.S. Treasury issue to finance the deficit?
A) government bonds B) tax increase notices C) directives to lower unemployment D) new regulations on spending
A business fluctuation when the pace of economic activity is slowing down is called
A) a reduction. B) a contraction. C) a depression. D) a slowdown.
According to the purchasing power parity theory, which of the following is most likely to affect exchange rates?
a. differences in inflation rates b. differences in interest rates c. differences in income levels d. differences in real GDP growth rates