Suppose that Tom bought a bike from Helen for $195. If Helen's reservation price was $185, and Tom's reservation price was $215, the seller's surplus from this transaction was:
A. $10
B. $215
C. $195
D. $20
Answer: A
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Comparing nominal GDP of 2012 to nominal GDP of twenty years ago
A) is an inaccurate measure of the change in total production. B) has no economic meaning. C) will be an accurate measure of the change in total production. D) determines the extent to which the cost of living changed. E) cannot be done because the two GDP measures use different prices.
An example of a positive externality is: a. freeway congestion
b. pollution in a resort lake. c. airport noise. d. beautiful trees on property along a parkway.
If the real exchange rate between the U.S. and Japan is 1, the nominal exchange rate is 100 yen per U.S. dollar and the price of chicken in the U.S. is $2.50 per pound, what is the price of chicken in Japan?
a. 400 yen per pound b. 250 yen per pound c. 100 yen per pound d. 40 yen per pound