Refer to Figure 6.3. If the market is in equilibrium, the consumer surplus is:
A. area ABC.
B. area BCD.
C. zero.
D. area ACD.
Answer: A
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Consider the following:
(i) Suppose a competitive industry has some factor of production whose supply is perfectly inelastic. As the demand for the industry's product rises and falls, what happens to the factor's employment and its rent? (ii) Repeat part i for the case where factor supply is perfectly elastic.
If the exchange rate rises as shown by the arrow in the figure above, the price of imports coming into the United States will be ________, Americans will supply ________ dollars in order to get the foreign exchange to purchase ________ imported goods
. A) higher; more; more B) lower; more; more C) lower; fewer; more D) lower; fewer; fewer E) higher; fewer; more The figure above shows supply curves of dollars in the foreign exchange market.
The circular flow shows that
A) aggregate production equals aggregate expenditure. B) aggregate expenditure is less than aggregate income. C) GDP equals aggregate income. D) Both answers A and C are correct.
Entrepreneurs often undertake the innovations that are necessary to bring inventions to the marketplace. Accordingly, what empirical pattern should be expected in an international comparison?
A) Countries with higher rates of entrepreneurship have higher rates of poverty. B) Countries with higher rates of entrepreneurship have lower rates of immigration. C) Countries with higher rates of entrepreneurship have lower rates of economic growth. D) Countries that protect the property rights of entrepreneurs will have higher rates of economic growth.