If the local slaughterhouse gives off an unpleasant stench, then the equilibrium quantity of meat will be ________ the quantity that maximizes total economic surplus.
A. higher than
B. lower than
C. equal to
D. more equitable
Answer: A
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Which of the following is an example of capital?
a. Education b. Natural resources c. Machinery d. Training e. Money
If a market is allowed to adjust freely to its equilibrium price and quantity, then an increase in demand will
a. increase producer surplus. b. reduce producer surplus. c. not affect producer surplus. d. Any of the above are possible.
Suppose that the central bank unexpectedly increases the growth rate of the money supply. In the short run the effects of this are shown by
a. moving to the left along the short-run Phillips curve. b. moving to the right along the short-run Phillips curve. c. shifting the short-run Phillips curve to the right. d. shifting the short-run Phillips curve to the left.
What condition is necessary for a fiat money system to work?
What will be an ideal response?