Refer to the accompanying figure. 
Based on the Keynesian cross diagram, at short-run equilibrium output,
A. firms will be producing more than they can sell.
B. there is a recessionary gap.
C. there is an expansionary gap.
D. output equals potential output.
Answer: C
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Jane is a top-level executive and is very rich. Jane just ordered a car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is true?
A) The car is not a scarce good. B) The car is a scarce good. C) Because Jane has unlimited funds, she incurs no opportunity cost in buying the car. D) Jane paid too much for a car that wasn't ready on time
A change in quantity supplied of a product is the result of a change in
A) the price of the product. B) consumer income. C) the cost of producing the product. D) the state of production technology.
Suppose a monopoly firm has an annual demand function of Qd = 20,000 - 250P, annual variable costs of VC = 16Q + 0.002Q2 and marginal cost of MC = 16 + 0.004Q, where Q is the annual quantity of output. In addition, the firm has an avoidable fixed cost of $25,000 per year. If this firm maximizes its profit, what is the value of the consumer surplus in the market?
A. $121,000 B. $60,500 C. $136,125 D. $0
Consider the market for ride-on lawn mowers and the recent increases in the price of oil. The recent increase in the price of oil makes it more expensive to manufacture ride-on lawn mowers. An increase in the price of oil also makes it more expensive to run a ride-on mower. If the price of oil increases, the demand for ride-on mowers will ______ and the supply will _______.
A. increase; increase B. decrease; decrease C. increase; decrease D. decrease; increase