The Latin phrase ceteris paribus means that when a relationship between two variables is being studied:
A. both are treated as unpredictable.
B. neither of those two variables is allowed to change.
C. all other variables are held fixed.
D. we recognize that some factors are unknown.
Answer: C
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The graph below represents the market for alfalfa. The equilibrium price is $7.00 per bushel, but the market price is $9.00 per bushel
Identify the areas representing consumer surplus, producer surplus, and deadweight loss at the equilibrium price of $7.00 and at the market price of $9.00.
In reviewing discussions of life in developing countries, what is it about lifestyles in the low-income countries compared with lifestyles in the high-income countries that most strikes you? Why?
What will be an ideal response?
Suppose that when the price of wheat is $2 per bushel, farmers can sell 10 million bushels. When the price of wheat is $3 per bushel, farmers can sell 8 million bushels. Which of the following statements is true? The demand for wheat is
a. income inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. b. income elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. c. price inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. d. price elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers.
A tax cut
A. Indirectly increases the disposable income of consumers. B. Contains less fiscal stimulus than an increase in government spending of the same size. C. Shifts the AD curve to the left. D. Directly decreases the disposable income of consumers.