The product of ____________________ and _________________ is equal to the total amount of spending in an economy
A) the money supply; the price level
B) velocity; the price level
C) the money supply; velocity
D) velocity; the level of output
C
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that
A) both bear an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie. B) both bear the same opportunity cost of seeing the movie because they are doing the same thing. C) it is not possible to calculate the opportunity cost of seeing the movie because the tickets were free. D) the opportunity cost of seeing the movie is zero because the tickets were free.
On a graph, consumer surplus is the area above the equilibrium price and below the demand curve.
Answer the following statement true (T) or false (F)
The case against advertising includes the fact that
A. it increases competition by decreasing barriers to entry of new firms into an industry. B. it ensures high quality and efficient production. C. it provides consumers with valuable information about product availability, quality, and price. D. firms spend large sums of money to create artificial differences among products.