The figure above shows the market for milk. If one firm owns all the milk outlets in the city and sells 100 gallons of milk
A) the market is efficient because the marginal social benefit from the last gallon of milk exceeds its marginal social cost.
B) the market is efficient because the total social benefit from milk exceed the total social cost.
C) there is a deadweight loss because the marginal social benefit from the last gallon of milk exceeds its marginal social cost.
D) there is a deadweight loss because the marginal social cost of the last gallon of milk exceeds its marginal social benefit.
C
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If a person withdraws $500 from his/her savings account and puts it in his/her checking account, then M1 will ________ and M2 will ________
A) not change; not change B) not change; increase C) increase; not change D) not change; decrease E) increase; decrease
Refer to Table 2-10. This table shows the number of labor hours required to produce a wristwatch and a bushel of rice in Japan and Thailand
a. Which country has an absolute advantage in the production of wristwatches? b. Which country has an absolute advantage in the production of rice? c. What is Japan's opportunity cost of producing one wristwatch? d. What is Thailand's opportunity cost of producing one wristwatch? e. What is Japan's opportunity cost of producing one bushel of rice? f. What is Thailand's opportunity cost of producing one bushel of rice? g. If each country specializes in the production of the product in which it has a comparative advantage, who should produce wristwatches? h. If each country specializes in the production of the product in which it has a comparative advantage, who should produce rice?
The expected real interest rate (r) is equal to
A) nominal interest rate minus inflation rate. B) nominal interest rate minus expected inflation rate. C) expected nominal interest rate minus inflation rate. D) nominal interest rate plus expected inflation rate.
What special role does the president play in creating fiscal policy?
What will be an ideal response?