Producer surplus is the area
a. under the supply curve.
b. between the supply and demand curves.
c. below the price and above the supply curve.
d. under the demand curve and above the price.
c
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If your income increases, what is the effect on your budget line?
What will be an ideal response?
A firm should increase its investment as long as:
a. marginal resource cost exceeds the interest rate. b. marginal resource cost exceeds marginal revenue product. c. marginal rate of return on investment exceeds the interest rate. d. the interest exceeds the marginal rate of return on investment.
We may note that unemployment:
A. only occurs during times of recession. B. is highest during times of economic booms. C. tends to increase during times of economic recovery. D. exists at any time during the business cycle.
If farmers operating in the competitive wheat industry are incurring losses, and are not kept in business with government subsidies, which of the following will result?
A) Price and quantity produced will both increase in the long run. B) Resources will be reallocated out of the wheat industry into more productive uses. C) Farmers will run economic losses indefinitely, if they are rational. D) The supply of wheat will fall to near zero and the U.S. will become dependent on foreign suppliers of food.