Answer the following statements true (T) or false (F)
1. The point where the supply curve and the demand curve cross is called the equilibrium.
2. Good weather is an example of a natural condition that affects supply for salmon fishing.
3. The equilibrium quantity is the common quantity where the amount of the product consumers want to buy (quantity demanded) is equal to the amount producers want to sell (quantity supplied).
4. Laws that governments enact to regulate prices are called price barriers.
5. One typical way that economists define efficiency is when it is possible to improve the situation of one party without imposing a cost on another.
1. True
This statement is true. The point where the supply curve and the demand curve cross is called the equilibrium.
2. True
This statement is true. Good weather is an example of a natural condition that affects supply for salmon fishing.
3. True
This statement is true. Equilibrium quantity is the common quantity where quantity demanded is equal to the quantity supplied.
4. False
This statement is false. Laws that governments enact to regulate prices are called price controls.
5. False
This statement is false. One typical way that economists define efficiency is when it is impossible to improve the situation of one party without imposing a cost on another.
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A surplus of labor is eliminated by ________ in the real wage rate and a shortage of labor is eliminated by ________ in the real wage rate
A) an increase; a decrease B) a decrease; an increase C) an increase; an increase D) a decrease; a decrease E) None of the above answers is correct because shortages and surpluses are eliminated by changes in the demand for labor and the supply of labor, not the wage rate.
Barbie is deciding whether to play soccer or go swimming over the next hour. She decides to swim. Economists would conclude that Barbie:
A. is revealing a preference for swimming over soccer. B. will get less utility from swimming during the next hour than playing soccer. C. was unable to play soccer at that time. D. is more skilled at swimming than playing soccer.
Both Keynesians and non-Keynesians now recognize
a. the limitations of automatic stabilizers as a stabilization tool. b. the adverse effects of high marginal tax rates on economic growth. c. the difficulties involved in timing discretionary changes in fiscal policy in a stabilizing manner. d. the highly expansionary impact of budget deficits.
If the Fed buys $10 million dollars in government securities, and the required reserve ratio is 20 percent, the banking system is able to expand the money supply by:
A. $10 million. B. $50 million. C. $2 million. D. $40 million.