Mister Jones was selling his house. The asking price was $220,000, and Jones decided he would take no less than $200,000. After some negotiation, Mister Smith purchased the house for $205,000. Jones' producer surplus is
A) $5,000.
B) $15,000.
C) $20,000.
D) not able to be calculated from the information given.
A
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If a firm in a competitive price-searcher market finds that its marginal revenue exceeds its marginal cost at the current rate of output, it should
a. raise the price of the product and expand its output. b. raise the price of the product and reduce its output. c. lower the price of the product and expand its output. d. lower the price of the product and reduce its output.
Hyperinflation is generally defined as inflation that exceeds 50 percent per month
a. True b. False Indicate whether the statement is true or false
Speculators play an important role in a system of floating exchange rates because
A. to make a profit, they must buy a currency when its value is low and sell it when its value is high. B. their purchases and sales lead to wild gyrations in exchange rates and thus increase instability. C. they place additional risks on businesses that need to purchase and sell foreign currency. D. All of the above are correct.
Demand-pull inflation:
A. occurs when total spending in the economy is excessive. B. is measured differently than cost-push inflation. C. can be present even during an economic depression. D. is also called "hyperinflation."