Use the figure below to answer the following question.
If a price floor in this market is set at P2, then consumer surplus equals area
A. a + b + d.
B. b.
C. a.
D. a + b.
Answer: C
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Explain why the competitive output maximizes welfare
What will be an ideal response?
The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a voluntary production reduction program to achieve their goal. What is the size of the aggregate surplus?
A. $4 billion B. $12 billion C. $10 billion D. $6 billion
If the structural unemployment rate is 3 percent, the frictional unemployment rate is 3 percent, and the current unemployment rate is 5 percent, then the economy is in a recessionary gap
Indicate whether the statement is true or false
The Temporary Assistance for Needy Families (TANF) program _____.
(A) Provides benefits to a family for ten years. (B) Can only provide jobs for individuals in an enterprise zone. (C) Only provides cash assistance to poor families. (D) Provides work in exchange for temporary assistance.