Which of the following policies face difficult problems of timing?
A) Fiscal policy
B) Monetary policy
C) Both of the above.
D) None of the above.
C
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A point lying inside (under) a production possibilities curve indicates that
a. the economy is saving money. b. there are no associated opportunity costs. c. more output could be produced with existing resources. d. technology limits production.
The horizontal axis on the aggregate demand-aggregate supply model measures
a. the price of the specific product produced. b. the level of total output. c. the price level. d. the level of employment.
The business activities of Firm A confer positive externalities on Firm B, and the business activities of Firm B confer positive externalities on Firm A. If the two firms merged, then
a. their respective markets would move closer to the social optimum. b. their respective markets would move further away from the social optimum. c. total surplus in their respective markets would decrease. d. the merger would serve as an example of a misguided public policy toward externalities.
Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
After trade, at a world price of Pw, consumer surplus equals area(s)
A. B + C + E + F. B. A. C. A + B + C + E + F. D. A + B + C + D.