When a good is excludable:
A. one person's consumption prevents or decreases others' ability to consume it.
B. it is possible for sellers to prevent its use by those who have not paid for it.
C. the government has specific import policies limiting its supply.
D. consumers have a perception of scarcity of that good.
Answer: B
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An increase in government purchases will increase aggregate demand because
A) the decline in the interest rate will increase demand. B) the decline in the price level will increase demand. C) consumption expenditures are a component of aggregate demand. D) government expenditures are a component of aggregate demand.
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If 10,000 units of iced tea are sold
A) the deadweight loss is equal to economic surplus. B) producer surplus equals consumer surplus. C) marginal benefit is less than marginal cost. D) the marginal benefit of each of the 10,000 units of iced tea equals $3.
In a graph of a firm's short-run total costs and total revenue, the total cost and the total revenue curves, respectively, will intersect the vertical axis
A) above the origin, above the origin. B) above the origin, at the origin. C) at the origin, at the origin. D) below the origin, below the origin.
Producer surplus refers to
a. the difference between the market price for a good and the minimum price the producer would accept b. the difference between the market price for a good and the maximum price a consumer would be willing to pay c. the excess supply a firm produces for the market d. the profit a producers receives for a good e. the difference between consumer surplus and the price of the good