Sally's Sandwiches produces sandwiches using one variable input-labor. Sally's Sandwiches is a ________ in the labor market and a ________ in the sandwich market.
A. consumer; producer
B. consumer; consumer
C. producer; producer
D. producer; consumer
Answer: A
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Refer to Figure 13-1. Ceteris paribus, an increase in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
A waitress brings a free glass of wine when you sit down in a restaurant. This glass of wine is
A) a service because the waitress carried it instead of making it. B) a good, but not an economic good because there is no price charged for the wine. C) a nongood because there is no price charged for the wine. D) an economic good because wine is produced with scarce resources, even if it is free to you.
The opportunity cost of holding excess reserves is equal to
A. the federal funds rate. B. the federal funds rate minus the discount rate. C. the discount rate. D. none of the above.
Price controls will tend to cause misallocation of resources because
a. production (or opportunity) cost no longer corresponds to market price. b. people are unable to determine their preferences at the high or low price. c. producers no longer have incentive to be profitable. d. consumers no longer have incentive to spend their income efficiently.