Related to the Economics in Practice on page 79: If a hurricane results in the supply of hotel rooms decreasing and the demand for hotel rooms increases, the equilibrium price for hotel rooms ________ and the equilibrium quantity of hotel rooms ________.
A. may increase, decrease, or stay the same; will decrease
B. will increase; will decrease
C. may increase, decrease, or stay the same; may increase, decrease, or stay the same
D. will increase; may increase, decrease, or stay the same
Answer: D
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Consumer surplus is
A) the total difference between the total amount that consumers actually pay for an item and the total amount that they would have been willing to pay. B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item. C) the total difference between the total amount that consumers would have been willing to pay for an item and the total amount that they actually pay. D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.
When General Motors pays an outside vendor for auto parts, this is an external cost.
Answer the following statement true (T) or false (F)
(Figure: Two SRAS Curves) The figure shows the AD-AS model with two SRAS curves. If the economy is initially at Point A and expected inflation rate remains unchanged, the economy can achieve a real GDP growth rate of 9% only by
What will be an ideal response?
The real-balance effect indicates that at higher price levels
A) the real value of money holdings increase, resulting in increased saving. B) the purchasing power of money will increase. C) the real value of money holdings fall, resulting in decreased spending. D) the value of the dollar will increase.