Refer to Figure 4-10. What is the area that represents consumer surplus after the imposition of the ceiling?
A) A + B + C B) A + B + D + F + G C) A + B + D D) A + B + D + F
C
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With floating exchange rates, BOP equilibrium is restored by
A) trade restrictions. B) earnings from foreign investments. C) exchange rate changes. D) All of the above.
Industry demand is given by: QD = 1000 – P
All firms in the industry have identical and constant marginal and average costs of $50/unit. a. If the industry is perfectly competitive, what will industry output be? What will be the equilibrium price? What profit will each firm earn? b. Now suppose that there are five firms in the industry, and that they collude to set price. What price will they set? What will be the output of each firm? What will be the profit of each firm?
If quantity demanded is greater than quantity supplied, then
a. an excess supply exists b. the market is in equilibrium c. the price will rise d. the supply curve must be vertical e. there will be no tendency for the situation to change
If a central bank reduced inflation by 2 percentage points and that made output fall by 3 percentage points for 2 years and the unemployment rate rise from 3 percent to 5 percent for 2 years, the sacrifice ratio is
a. 1. b. 2. c. 3. d. None of the above is correct.