At the output where the combined amounts of consumer and producer surplus are largest:
A. the areas of consumer and producer surplus necessarily are equal.
B. the maximum willingness to pay for the last unit of output equals the minimum acceptable
price of that unit of output.
C. consumer surplus exceeds producer surplus by the greatest amount.
D. marginal benefit exceeds marginal cost by the greatest amount.
Answer: B
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The phenomenon whereby labor decreases in response to a decrease in the wage rate is called
a. the substitution effect. b. the scale effect. c. derived demand from a change in wage. d. the factor regressivity of labor.
Which of the following is true about M1 and M2?
A. M1 includes currency, but M2 does not. B. Neither M1 nor M2 includes money market mutual funds. C. M2 includes saving deposits and money market mutual funds, but M1 does not. D. M1 and M2 both include checking accounts and savings accounts.
The changing of government expenditures or taxes to achieve national economic goals is
A) inflationary fiscal policy. B) automatic fiscal policy. C) recessionary fiscal policy. D) discretionary fiscal policy.
Refer to the above figure. The above figure shows the cost structure of a firm producing an information product. Which curve represents average total cost?
A) Any of the 3 could be ATC. B) Curve 1 C) Curve 2 D) Curve 3