Use the following general linear supply function:Qs = 40 + 6P - 8PI + 10F where Qs is the quantity supplied of the good, P is the price of the good, PI is the price of an input, and F is the number of firms producing the good. Suppose PI = $40, F = 50, and the demand function is Qd = 700 - 6P , then if government sets a price of $50 what will be the result?
A. a shortage of 160
B. a surplus of 120
C. a surplus of 160
D. a shortage of 120
Answer: B
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At prices below a consumer's willingness to pay:
A. the buyer will participate in the market because the opportunity cost is less than the benefit from consuming the good. B. the buyer will participate in the market because the opportunity cost is more than the benefit from consuming the good. C. the buyer will not participate in the market because the opportunity cost is less than the benefit from consuming the good. D. the buyer will not participate in the market because the opportunity cost is more than the benefit from consuming the good.
Explain why economists do not use exchange rates to compare standards of living across countries. Also, discuss what economists do to avoid these problems
What will be an ideal response?
The dollar value of final output
A. is greater than total income. B. equals profits. C. is equal to total income. D. is less than total income.
How did the international monetary system created at Bretton Woods in 1944 allow its members to reconcile their external commitments with their internal goals of full employment and price stability?
What will be an ideal response?