Which of the following best describes the "wealth effect"?
A) When the price level falls, the real value of household wealth falls.
B) When the price level falls, the real value of household wealth rises.
C) When the price level falls, the nominal value of household wealth rises.
D) When the price level falls, the nominal value of household wealth falls.
B
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The figure above represents the competitive market for slices of key lime pie. When the price is $3, the total producer surplus equals
A) $0. B) $60. C) $90. D) $120. E) None of the above answers is correct.
The Medicaid program is financed by _____
a. excise taxes b. state governments c. the federal government d. state governments and the federal government
Because market price always tends back to the minimum average total cost for all identical firms in a perfectly competitive market in the long run, in theory:
A. the supply will remain a constant quantity. B. price will be the same at any quantity. C. the supply curve will be upward sloping. D. the supply curve may be downward sloping.
Maximum Feasible Hourly Production Rates of EitherProduct A or Product B Using All Available ResourcesProductCountry XCountry YA48B44 Refer to the above table. If opportunity costs are constant and both countries produce only the goods for which they have comparative advantages and then trade, hourly world output would equal
A. 12 units of product A and 8 units of product B. B. 8 units of product A and 8 units of product B. C. 4 units of product A and 4 units of product B. D. 8 units of product A and 4 units of product B.