Under the long-run equilibrium, for perfectly competitive markets without any government intervention,:
a. producer surplus is greater than consumer surplus.
b. consumer surplus is greater than producer surplus.
c. the sum of consumer and producer surplus is maximized.
d. consumer surplus is maximized.
e. producer surplus is maximized.
c
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All else being equal, if the prospect of a recession leads the Federal Reserve to ease monetary policy, the equilibrium value of the exchange rate for the U.S. dollar will:
A. fall. B. either rise or fall depending on whether the supply or demand for dollars changes more. C. remain fixed. D. rise.
Ceteris paribus, if the French decide they want to drink more Chinese-grown tea, this causes the ________ Chinese currency to ________.
A. supply of; decrease B. demand for; decrease C. demand for; increase D. supply of; increase
A positive externality exists when ______.
a. a situation occurs where an informed party benefits in an exchange by taking advantage of knowing more than the other party b. the available information is initially distributed in favor of one party relative to another in an exchange c. costs spill over to an outside party who is not involved in producing or consuming the good d. benefits spill over to an outside party who is not involved in producing or consuming the good
The real wage rate is the nominal wage rate adjusted for inflation since some base year.
Answer the following statement true (T) or false (F)