Use the figure above to answer this question. Mary is the only veterinarian in a small town and rents a space for her practice. If Mary's landlord decided to charge ________ per hour in rent, Mary would ________
A) $20 more; earn $0 economic profit
B) $20 more; still earn an economic profit because she is a monopolist
C) $30 more; earn $0 economic profit
D) $10 less; raise her prices and earn a higher profit
E) $30 more; operate on the inelastic portion of her demand curve
A
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According to classical economists, the credit market reaches an equilibrium when
A) desired investment equals desired saving. B) desired investment equals planned changes in aggregate supply. C) desired investment equals planned investment. D) planned investment equals government expenditures.
A fall in the money wage rate ________ aggregate supply and ________
A) decreases; shifts the AS curve rightward B) increases; shifts the AS curve leftward C) decreases; shifts the AS curve leftward D) increases; shifts the AS curve rightward E) does not change; does not shift the AS curve
Refer to Figure 4-3. If the market price is $3.00, what is Kendra's consumer surplus?
A) $6.50 B) $5.50 C) $2.50 D) $0.50
During a recession, automatic stabilization causes the government budget deficit to
A) fall. B) increase. C) remain stable. D) move in the same direction as Y.