Macro equilibrium is established at which price level, given AD1 and AS1 in Figure 8.3?
A. P1.
B. P2.
C. P3.
D. P4.
Answer: B
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Andrew has the utility of wealth curve shown in the above figure. He owns an SUV worth $30,000 and that is his only wealth. There is a 10 percent chance that he will have an accident within a year. If he does have an accident, his SUV is worthless
Suppose all SUV owners are like Andrew. An insurance company agrees to pay each person who has an accident the full value of his/her SUV. The company's operating expenses are $1,500. What is the minimum insurance premium that the company is willing to accept? A) $1,500 per year B) $4,500 per year C) $3,000 per year D) $6,000 per year
Explain the concept of consumer equilibrium
What will be an ideal response?
In economics, ________ means a shortage or insufficient amount of supply
a. Scarcity b. Supply considerations c. Leveraging d. Risk
If medical care is provided free of charge,
a. no one utilizes it b. beneficiaries consume it up to the point at which the demand curve intersects the vertical axis c. beneficiaries derive no consumer surplus from medical care d. beneficiaries consume the same amount they have always consumed e. beneficiaries consume it up to the point at which the marginal benefit of the final unit is zero