The equilibrium price and quantity in a market usually produce allocative efficiency because:
A. all consumers who want the good are satisfied.
B. marginal benefit and marginal cost are equal at that point.
C. equilibrium ensures an equitable distribution of output.
D. the excess of goods produced at equilibrium guarantees that all will have enough.
Answer: B
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If an automobile manufacturer has an agreement with its air bag? supplier, this is an example of a? ________ agreement.
A) rightward
B) vertical
C) horizontal
D) leftward
If inflationary expectations decrease, the Phillips curve will
A. become vertical. B. become upward sloping. C. shift to the right. D. shift to the left.
Consider the market for credit. When the demand for credit increases while the supply of credit remains unchanged,
A) the interest rate will decrease and the amount of credit provided in the market will increase. B) the interest rate will increase and the amount of credit provided in the market will increase. C) the interest rate will decrease and the amount of credit provided in the market will decrease. D) the interest rate will increase and the amount of credit provided in the market will decrease.
U.S. dollars can currently be exchanged for gold by foreign central banks, but not by U.S. citizens
Indicate whether the statement is true or false