When two people agree to a price in a negotiation, we can assume that:
A. each one will receive equal benefits from the transaction.
B. the seller will receive more benefit from the transaction than the buyer.
C. both parties will benefit.
D. only one of the parties will benefit, but there is not enough information to determine which one it will be.
Answer: C
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Stefano has just completed an original oil painting. After considering the costs for brushes, paint, canvas, and the value of Stefano's labor time, the marginal cost of the painting is $1,000. Lucky Stefano. One art lover paid him $1,500
How much producer surplus did Stefano obtain? A) The amount of producer surplus cannot be determined from the information given. B) $1,500 C) $1,000 D) $500
If you believe that velocity is constant and that the aggregate supply curve is vertical, then the quantity theory of money would predict that a doubling of the money supply would cause a doubling of
a. nominal output and real output. b. nominal output and no change in real output. c. real output and no change in nominal output. d. the price level and real output.
The primary problem with estimating elasticity of demand is that:
A. real-world changes in quantity demanded are the result of changes in price only. B. data on the quantities firms sell are unavailable. C. real-world changes in quantity demanded are the result of changes in many variables other than price alone. D. data on the prices firms charge are unavailable.
If the MPC is .6, the multiplier is
A. .4. B. .6. C. 1. D. 2.5.