Regulation is appropriate if
A. It improves market outcomes regardless of costs.
B. Government failure exists.
C. An economic profit is being earned.
D. Market failure exists and the benefits of regulation exceed the costs.
Answer: D
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The primary difference between the aggregate demand curve and an individual demand curve is that
A. the aggregate demand curve represents total planned expenditures on all goods and services while an individual demand curve represents a single good or service. B. a change in the price level will shift the aggregate demand curve but not an individual demand curve. C. the aggregate demand curve is vertical in the long? run, while an individual demand curve is downward sloping. D. a change in real balances will shift an individual demand curve but not the aggregate demand curve.
Ceteris paribus, in a closed economy, if consumers become more optimistic ________
A) autonomous consumption would decrease B) the equilibrium interest rate should increase C) saving should increase D) all of the above E) none of the above
Refer to Scenario 17.3. If the fire protection program were in place, the company could insure the warehouse for a premium equal to
A) the loss from the fire, $300,000. B) the expected loss from the fire, $300. C) the expected loss from the fire, $3,000. D) the cost of the fire protection program, $80. E) $0.
Total surplus:
A. is producer and consumer surplus combined.
B. is producer surplus minus consumer surplus.
C. is consumer surplus minus producer surplus.
D. is the total amount spent on a good in a market.