Consider the monopoly in the figure below with price regulated at $20 per unit. The regulated price will result in a: 
A. surplus of 18 units.
B. shortage of 18 units.
C. shortage of 3 units.
D. surplus of 3 units.
Answer: B
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The nineteenth-century British economist Thomas Malthus argued that the law of diminishing returns implied that
A. raw materials would eventually run out. B. eventual misery would befall the human race. C. technological change would grow at an increasing pace. D. capital would increase relative to labor.
Each year around July 4 the town of Flagston has a controversy over how big a fireworks display they should have on the holiday. The three citizens have the demand functions for fireworks that are shown here. The cost per firecracker is $18. Elmer has the demand function P = 20 - Q. Ethel's demand equation is P = 12 - .6Q, and Edith has the demand P = 8 - .4Q. If the fireworks show is left to the private marketplace, what is likely to happen?
What will be an ideal response?
In constructing the short-run aggregate supply curve, we define the short run as the period in which _____
Fill in the blank(s) with the appropriate word(s).
In an open economy under flexible exchange rates, expansionary monetary policy that results in an increase in the money supply will always cause
A) an increase in output. B) an increase in exports. C) a reduction in the exchange rate, E. D) all of the above E) only A and C