________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact, it is a change in variable Y that caused a change in variable X
A) The omitted variable
B) The positive-to-negative relationship
C) Reverse causality
D) Nonlinear slope
Answer: C
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Demand in a perfectly competitive market is Q = 100 - P. Supply in that market is Q = P - 10. What is the market equilibrium price and quantity? Given that price and quantity, how much consumer surplus, producer surplus, and deadweight loss is there? If the government imposes a $40 price ceiling, what quantity will be produced and sold? Assuming that those who value the good the most actually get after the ceiling is imposed, how much consumer surplus, producer surplus, and dead-weight loss is there?
What will be an ideal response?
Demand-pull inflation occurs
A) when the aggregate supply curve shifts to the right, while aggregate demand remains stable. B) when the aggregate demand curve shifts to the right, while aggregate supply remains stable. C) when the aggregate demand curve shifts to the left, while aggregate supply remains stable. D) when the aggregate supply curve shifts to the left, while aggregate demand remains stable.
Proponents of a balanced budget amendment to the Constitution argue that it will finally exert discipline on the federal government and so prevent large peacetime deficits. What do the critics argue?
What will be an ideal response?
If consumers paid an amount for any good that reflected the value of the total benefits they receive from consuming it, then
a. consumer surplus would be at a maximum b. consumer surplus would be equal to zero c. total revenue would equal variable cost d. consumer surplus would equal producer surplus e. producer surplus would exceed consumer surplus